DOCUMENTS 
DEPT. 


COMPLIMENTS  OF 


- 


Attorney  General        / 


STATE   OF    NEW    YORK 


REPORT 


OF  THE 

-77, 


ATTORNEY  GENERAL 


IN  THE  MATTER  OF  THE 


MILK   INVESTIGATION 


TRANSMITTED  TO  THE  LEGISLATURE  APRIL  25,  1910 


ALBANY 

J    B.  LYON  COMPANY,  PRINTERS 
1910 


60CUMEWTS 

DEPT. 


STATE  OF    NEW  YORK 


Xo.  45. 


I  N    S  E 

"April  25,  1910. 


Report  of  the  Attorney-General  in  the  Matter  of  the  Milk 

Investigation. 


To  the  Legislature: 

In  the  latter  part  of  November,  1909,  my  attention  was  called 
to  certain  facts  and  circumstances  tending  to  show  that  a  com- 
bination in  restraint  of  trade  and  a  monopoly  in  the  milk  traffic 
existed  in  the  city  of  New  York.  This  information  consisted  of 
statements  made  in  the  public  press,  a  complaint  made  to  this 
Department  by  a  board  of  trade  in  the  borough  of  Kings,  New 
York  city,  and  the  fact  that  the  price  of  canned  milk  had  been 
simultaneously  advanced  one  cent  a  quart  by  all  the  dealers  in 
New  York  city,  on  Novem'ber  1,  1909.  If  this  information  and 
charges  were  true,  it  was  a  serious  matter  and  demanded  prompt 
action.  Milk  being  an  article  of  common  consumption  among 
all  the  people  in  Greater  New  York,  I  deemed  it  my  duty  to  im- 
mediately investigate  these  charges,  with  a  view  of  ascertaining 
whether  or  not  they  were  well  founded. 

On  the  6th  day  of  December,  1909,  in  pursuance  of  article  22 
of  the  Consolidated  General  Business  Law  of  the  State,  commonly 
known  as  the  Anti-Monopoly  Law,  I  made  an  application  to  the 
Supreme  Court,  in  the  county  of  New  York,  for  the  appointment 
of  a  referee  to  take  the  testimony  of  certain  witnesses  in  reference 
to  the  existence  of  such  a  monopoly  and  combination  in  restraint 
of  trade. 

721555 


4  [SEX  ATE 

Said  act,  among  other  things,  provides  : 

"  §  340.  Contracts  for  monopoly  illegal  and  void.    Every 

contract,  agreement,  arrangement  or  combination  whereby  a 

t  monopoly  in  the  manufacture,  production  or  sale  in  this  state 

of  any  article  or  commodity  of  common  use  is  or  may  be 

ited,   "-laMi-liO'l  or  maintained,  or  whereby  competition 


in  this  jtate  in  the  supply  or  price  of  any  such  article  or 
i-n:i;n:<,!!ity  is  i>r  n:av  be  restrained  or  prevented,  or  whereby 
for  the  purpose  of  creating,  establishing  or  maintaining  a 
monopoly  within  this  state  of  the  manufacture,  production  or 
sale  of  any  such  article  or  commodity,  the  free  pursuit  in  this 
state  of  any  lawful  business,  trade  or  occupation  is  or  may  bo 
restricted  or  prevented,  is  here'by  declared  to  be  against  pub- 
lic policy,  illegal  and  void." 

REMEDIES. 

Two   remedies   are   given   for   the   enforcement   of  the   section 
above  : 

1.  By  section  .'5-1-1  it  is  provided: 

Penalty.  Kvory  person  or  corporation,  or  any  officer  or 
agent  thereof,  who  shall  make  or  attempt  to  make  or  enter 
into  any  such  contract,  agreement,  arrangement  or  combina- 
tion, or  who  within  this  state  shall  do  any  act  pursuant 
thereto,  or  in,  toward  or  for  the  consummation  thereof, 
(wherever  the  same  may  have  been  made,  is  guilty  of  a  mis- 
demeanor,  and  on  conviction  thereof  shall,  if  a  natural  per- 
son, be  punished  by  a  fine  not  exceeding  five  thousand  dollar-, 
or  by  imprisonment  for  not  longer  than  one  year,  or  by  both 
such  fine  and  imprisonment;  and  if  a  corporation,  by  a  fine 
of  not  exceeding  five  thousand  dollar.-. 

2.  Section  342  provide-  : 

"Action  to  restrain  and  prevent.  The  attorney-general 
may  bring  an  action  in  the  name  and  in  behalf  of  the  people 
of  the  state  against  any  person,  trustee,  director,  manager  or 
other  officer  or  agent  of  a  corporation,  or  against  a  corpora- 
tion, foreign  or  domestic,  to  restrain  and  prevent  the  doing  in 
this  state  of  any  act  herein  declared  to  be  illegal,  or  any  act 


o.  45.]  5 

in,  toward  or  for  the  making  or  consummation  of  any  con- 
tract, agreement,  arrangement  or  combination  herein  pro- 
hibited, wherever  the  same  may  have  been  made." 

3.   Section  343  provides: 

"Procedure;  application  for  order.  Whenever  the  at- 
torney-general has  determined  to  commence  an  action  or  pro- 
ceeding under  this  article,  he  may  present  to  any  justice  of 
the  supreme  court,  before  beginning  such  action  or  proceed- 
ing, an  application  in  writing,  for  an  order  directing  the  per- 
sons mentioned  in  the  application  to  appear  before  a  justice 
of  the  supreme  court,  or  a  referee  designated  in  such  order, 
and  answer  such  questions  as  may  be  put  to  them  or  to  any 
of  them,  and  produce  such  papers,  documents,  and  books, 
concerning  any  alleged  illegal  contract,  arrangement,  agree- 
ment or  combination  in  violation  of  this  article;  and  it  shall 
be  the  duty  of  the  justice  of  the  supreme  court,  to  whom  such 
application  for  the  order  is  made,  to  grant  such  application. 
The  application  for  such  order  made  by  the  attorney-general 
may  simply  show  upon  his  information  and  belief  that  the 
testimony  of  such  person  is  material  and  necessary.  The 
provisions  of  the  code  of  civil  procedure,  chapter  nine,  title 
three,  article  one,  relating  to  the  application  for  an  order  for 
the  examination  of  witnesses  before  the  commencement  of 
an  action  and  the  method  of  proceeding  on  such  examinations, 
shall  not  apply  except  as  herein  prescribed.  The  order  shall 
be  granted  by  the  justice  of  the  supreme  court  to  whom  the 
application  has  been  made,  with  such  preliminary  injunction 
or  stay  as  may  appear  to  such  justice  to  be  proper  and  ex- 
pedient, and  shall  specify  the  time  when  and  place  where  the 
witnesses  are  required  to  appear,  and  such  examination  shall 
be  held  either  in  the  city  of  Albany,  or  in  the  judicial  dis- 
trict in  Avhich  the  witness  resides,  or  in  which  the  principal 
office  within  this  state,  of  the  corporation  affected,  is  located. 
The  justice  or  referee  may  adjourn  such  examination  from 
time  to  time  and  witnesses  must  attend  accordingly.  The 
testimony  of  each  witness  must  be  subscribed  'by  him,  and  all 
must  be  filed  in  the  office  of  the  clerk  of  the  county  in  which 
such  order  for  examination  is  filed." 


6  [.SENATE 

• 

In  pursuance  of  the  above  provisions  and  upon  my  application, 
Mr.  Justice  Seabury  appointed  William  Grant  Brown  referee  to 
take  the  testimony.  I  designated  John  B.  Coleman,  Esq.,  of  32 
Nassau  street,  Xew  York  city,  Special  Deputy  Attorney-General, 
to  conduct  the  investigation.  The  order  directed  that  the  exami- 
nation of  witnesses  be  held  in  the  office  of  the  Attorney-General, 
]Sio.  299  Broadway,  borough  of  Manhattan,  Xew  York  city,  or 
such  other  place  in  the  city  of  Albany  as  the  referee  shall  designate, 
and  ordered  that  the  directors,  officers  and  managers  of  the  Con- 
solidated Milk  Exchange,  a  foreign  corporation  engaged  in  busi- 
ness in  the  State  of  Xew  York,  the  officers,  directors,  managers  and 
agents  of  the  Borden  Condensed  Milk  Company,  a  foreign  corpora- 
tion engaged  in  business  in  the  State  of  Xe\v  York,  and  the  of- 
ficers, managers,  agents  and  directors  of  the  (Sheffield  Farms,  Slos- 
son-Decker  Company,  a  domestic  corporation  engaged  in  business 
in  the  State  of  ISTew  York,  and  the  officers,  managers,  agents  and 
directors  of  thb  Mutual  Milk  and  Cream  Company,  a  domestic 
corporation  doing  business  in  the  State  of  Xew  York,  The  Alex- 
ander Campbell  Milk  Company,  to  appear  before  said  referee,  at 
various  dates  mentioned  in  said  order,  and  answer  such  questions 
as  might  be  put  to  them,  or  any  of  them,  and  to  produce  such 
papers,  documents  and  books,  concerning  such  illegal  contract, 
arrangement  or  combination,  as  said  referee  should  require,  and 
further  directed  and  ordered  certain  officers  of  the  Consolidated 
Milk  Exchange  to  produce  upon  such  examination  all  minute 
books,  books  of  record,  papers  or  memoranda  showing  proceedings 
taken  at  the  meetings  of  the  board  of  directors  and  the  stockholders 
of  such  company,  from  the  time  of  its  organization  down  to  the 
present  time,  together  with  a  copy  of  its  by-law?,  rules  or  regula- 
tions for  the  conduct  of  its  business,  and  a  list  of  its  stockholders ; 
also  its  stock  books,  stock  ledgers  and  stock  certificate  books,  con- 
tracts, books,  records  and  agreements  and  memoranda  showing  the 
prices  fixed  by  said  company  for  the  purchase  and  sale  of  milk. 

Similar  provisions  of  the  order  directed  certain  officers  of  the 
Borden  Condensed  Milk  Company,  the  Mutual  Milk  and  Cream 
Company  and  the  Sheffield  Farms,  Slosson-Decker  Company,  to 
produce  similar  records  of  books,  papers,  memoranda  and  proceed- 
ing of  their  companies  respectively. 


Certain  officials  of  all  the  corporations  heretofore  named  were 
examined  upon  the  hearings  before  the  referee.  Mr.  Marvin 
Scudder,  an  expert  accountant,  at  my  direction,  examined  the 
books  of  the  Borden,  the  Sheffield,  the  Mutual  Milk  Company  and 
the  Alexander  Campbell  Milk  Company. 

Hearings  were  held  in  the  city  of  Albany,  where  about  twenty- 
eight  milk  producers  testified,  who  were  not  named  in  the  order  of 
the  court.  Each  one  of  these  represented  one  of  the  large  dairy 
counties  of  the  State,  as  follows:  Allegany,  Broome,  Delaware, 
St.  Lawrence,  Montgomery,  C'attaraugus,  Erie,  Tioga,  Herkimer, 
Chenango,  Otsego,  Franklin,  Albany,  Washington,  Orange,  Oswego, 
Jefferson  and  Oneida. 

It  was  thought  wise  to  call  the  producers,  to  ascertain  the 
prices  that  have  been  obtained  for  milk,  covering  a  period  of  years 
back,  the  approximate  cost  to  produce  and  market  the  milk,  and  in 
general  to  get  all  the  information  possible  regarding  the  cost  of 
production,  transportation  and  distribution  of  milk  in  the  city  of 
Xew  York. 

During  the  investigation  much  valuable  information  was 
brought  out  or  offered  by  persons  having  made  a  study  of  various 
phases  of  the  question  of  pure  milk,  the  amount  of  milk  consumed 
annually  in  !N"ew  York  city,  a  comparison  of  the  Borden  and  Con- 
solidated Milk  Exchange  prices,  the  price  of  fluid  milk  prevailing 
in  various  cities  of  the  United  States  and  Canada,  statistical  re- 
ports on  the  population  of  milk  cows,  etc.,  the  milk  supply  of  New 
York  city,  with  recommendations  submitted  to  the  miayor  by  the 
milk  commission,  country  milk  and  dairy  inspection  by  the  de- 
partment of  health,  city  of  ISTew  York,  pasteurization  of  milk, 
milk  supply  and  control  in  Berlin,  together  with  much  valuable  in- 
formation upon  the  subject  of  milk  as  a  medium  of  infectious 
diseases,  dealing  with  the  general  subject  of  handling  milk  from 
the  standpoint  of  public  health  to  the  consumer. 

About  3,700  pages  of  testimony  were  taken  in  this  investigation. 
The  referee,  with  much  pains  and  labor,  has  digested  in  a  brief 
narrative  form  all  of  the  testimony  taken,  covering  these  subjects, 
down  to  474  pages,  in  a  separate  volume,  a  copy  of  which  I  here- 
with submit  with  my  report.  It  contains  invaluable  information 
to  the  producers,  distributors  and  consumers  of  milk,  and  I  most 


8  [SEX ATE 

earnestly  recommend  that  the  synopsis  of  the  testimony  and  in- 
formation obtained  upon  these  hearings,  as  reduced  by  the  referee, 
be  printed  in  a  limited  number  of  volumes,  for  distribution  among 
those  interested  in  the  production  and  consumption  of  this  article 
of  common  necessity. 

The  hearings  before  the  referee  commenced  011  the  6th  day  of 
December,  1J>09,  and  continued  until  the  3d  day  of  March,  1910. 
I  here  desire  to  commend  the  very  efficient  services  rendered  the 
State  by  the  Special  Deputy  Attorney-General,  Mr.  John  B.  Cole- 
man,  and  the  referee,  Mr.  William  Grant  Brown.  The  testimony 
taken  and  information  gathered  disclosed  the  following  facts: 

AS  TO  THE  EXISTENCE  OF  AX  AGREE  ME  XT  OR 
COM  IUXATIOX  TO  FIX  THE  PRICE  PAID  TO  THE 
PRODUCER. 

In  1882,  the  Milk  Exchange,  limited,  was  organized  under  the 
laws  of  this  State,  ostensibly  for  the  purpose  of  fixing  a  fair  and 
equitable  price  to  be  paid  for  milk  to  the  producers  by  the  dealers 
doing  business  in  Xe\v  York  city  and  vicinity.  The  producers 
were  not  given  an.  equal  representation  with  the  dealer-  in  the  cor- 
poration, the  result  being  that  the  producers  with  tV\v  exceptions 
became  inactive  in  the  proceedings  of  the  Exchange.  The  Kx- 
change  met  each  month  and  fixed  the  prices  that  the  members  of 
the  Exchange  would  pay  to  the  producer-  for  milk  and  also  did  a 
small  commission  business  in  selling  milk. 

In  1SU1,  the  Attorney-General  brought  an  action  to  dissolve 
this  corporation,  on  the  ground  that  it  was  a  combination  to  limit 
and  lessen  the  supply  of  milk  in  the  State  of  Xe\v  York  and  to 
fix  and  control  the  price  thereof. 

This  litigation  resulted  in  a  judgment  being  entered  in  the 
county  of  Broouio  H  1805,  dissolving  the  corporation  and  nullify- 
ing its  charter  on  the  grounds  stated. 

About  six  months  later,  practically  the  same  dealers  and  persons 
who  composed  the  officers  of  the  board  of  directors  of  the  Milk  Ex- 
change, limited,  incorporated  in  the  State  of  Xew  Jersey,  under 
the  name  of  the  Consolidated  Milk  Exchange.  Four  of  the  orig- 
inal incorporators  of  the  Exchange  were  original  incorporators  of 
the  Consolidated  Milk  Exchange  and  Alfred  Ely  was  attorney  for 


\  1> 

tho   Milk   l-Aohanao  ami   .  1  as  oo;:nsol  for  it   in  iho  action 

.issolntion.      Tho   principal  .     i  OOftoli4%t&d    Milk 

:  \.  .;.    V  \x    >      ;v  -.-.o  .MS  that  of  iho  formov 

\  v     :nol    ami 

I   :ho  prior  to  ho  pai<l  milk  in  tho 

samo  mannor  .MS  tho  hoaro!  of  tlin  tlu^  old    Milk 

did.     'I'lio  nuMhotl  :hiopto«l  l\v  iho  (\>nsoli,l:H«vl  Milk 

\  of  milk  \^  \^ 

Etch   ilinvtor  \\.-is  :i   niombiM-  of   iho   "  ronnnin<v  on 
\       r  :in  infonn.-il  ,lis»Mis-i,>n  of  \\l\Mf  thr  :uilk  on-\hi  to  Iv 

for  tlh^  siu'o<Mslino-  month.  .M   h.Mlloi    \\  ;u   l.Mk.Mi.  :m,l   M  ill   of 

th.M!    ballot    iho   pri.-o  \\  :u    ;i\,^J,.      A    samplo  of   th«>  ftjCUot)   of   llu^ 
•nmittoo  on  N'alr..  dkolotfcd  1\\    tho  nun: 

:in  OtOTS,   i>  M-   follow 

'•  \  MTM  thon  or<l(M'(\l.  -iil>jcol  to  tho  »-all  of  (ho  .'h;nr.  an.l. 

on    r(-isMMi>hliniV.    tho    I'lnirman    on    nlUM    WpOfttd    that,    in    tho 
jmlumont    of   tho   o>MnmilUv.   \\\^\    fonn.l    tho   \alno  &f  milk    60   I1- 
PCM-  ran  of  fortv  »piarN.   !(>--   fivij'.hi   rh:ir.",,"-   from   oa.-h   Pi 
shinpini:  point.    to^otluM-   with    an   allowanoo  of   li\o  OWltl    pW  OH) 
for  &horttg%,      Tin-  r, -port    W*M  «lnl\    MQtp^sd»f- 

Tho  word  "  nlu«  "  la  aied  instead  <>i'  th«»  woH  "  pn. .  "  fw  <ho 

ninlonhtoil    pnrp.>-o  «»f  o\a«lin;',   a    \i.'l:ilion   of  tho  law    |»rohihi  1 1  n". 

tin*  ti\in^  of  prices,    [ndeed  a  record  of  one  of  the  meeting*  ^f  till 
company  shows  that  iho  \\--M-. l  M price"  wri    Drtginall]  o«*d,  i»ni 

Waa  -M'h'krn  out  an.  1   tho  \\  -.»r.l  "  \  a  In,-  "   in  ..-i-t«-.l. 

AI'I.T  iho  pricei  or  values  ww*  ii\o.i  in  du.  \\:i\.  ih<\\  \voro 
communicated  t«»  tho  Milk   l\op.>n.T.  a  tiewtpaper  puhli.ho.i  m 
\'.u  Jertey,    CTpon  tho  receipt  thereof,  tho  Milk  Eteportei 
ont  postal  O.MI-.U  to  i  fiber  .  oompri  [B|  pwodotllj  ail  ol 

tho  members  «>f  tho  Oonsolidated  MUK  Exchange,     rh.-  i  pottali 

Were  Of  iho  fnlh.win;'.  -MMK-I-M!   f,.rm  : 

"OFFICE  OF  TUP:  MILK  BEKXBTBB, 

"Sn    «  x.  \.  ,1 ,10     , 

"  ( 'ommonoinir  Oolohor    I ami    nnlil   nlhrrwi  .o 

announced,  iho  prior  <>f  milk  will  i>r centi  pn-  «piart,  being 

an  advance  <>f <.f  M  oeni  p«-r  <pi:n-i. 

"Tin-:  MM  K  EUBPOBTEB." 


10  [SENATE 

Borden's  Condensed  Milk  Company,  the  largest  dealer  in  milk 
in  the  State,  gave  notice  every  six  months  to  the  producers  what  it 
would  pay  for  milk  during  the  ensuing  six  months.  Borden's 
prices  and  those  established  by  the  Exchange  were  not  always  the 
same,  but  on  the  average  were  substantially  the  same.  In  the 
same  wray  the  Sheffield  Farms,  Slawson-Decker  Company,  the 
second  largest  dealer,  sent  out  the  prices  it  would  pay  to  the  pro- 
ducer. In  some  cases  the  price  was  exactly  the  same  as  Borden's ; 
in  other  instances,  the  same  as  the  Exchange,  and  in  others  a  price 
which  approximated  Borden's  and  the  Milk  Exchange  prices. 

The  result  was  that  a  producer  desiring  to  sell  his  milk  in  the 
New  York  market  was  compelled  to  sell  either  at  Borden's  or  the 
Exchange  prices,  which  were  practically  identical,  and  if  not  sat- 
isfied with  either  of  these,  he  was  compelled  either  to  manufacture 
his  milk  into  butter  or  cheese,  or  market  it  with  unknown  and 
oftentimes  irresponsible  dealers.  On  account  of  these  conditions 
many  farmers  have  stopped  producing  milk  and  there  exist  many 
abandoned  dairy  farms  throughout  the  State. 

In  my  judgment  these  facts  have  demonstrated  that  there  exists 
in  New  York  city  a  condition  which  in  effect  is  a  combination 
which  fixes  the  price  at  which  the  producer  is  obliged  to  sell  milk 
and  that  he  has  no  voice  in  determining  what  that  price  will  b<-. 

THE  PRICES  PAID  THE  PRODUCERS  WERE  UNREA- 
SONABLE AND  UNPROFITABLE. 

The  evidence  further  shows  that  the  average  price  paid  by  the 
Exchange  and  Borden's  to  the  producer  for  the  years  1908  and 
1909  was  from  3%  to  3J/2  cents  a  quart.  The  average  cost  of 
production  during  the  same  period,  as  testified  to  by  the  producers, 
was  3.513  cents  a  quart.  They  were  unanimous  in  agreeing  that 
they  were  selling  milk  for  about  what  it  cost  to  produce. 

The  figures  as  to  cost  of  production  given  by  the  producers  are 
substantially  the  same  as  those  given  by  the  witnesses  called  who 
were  dealers  and  also  producers,  all  agreeing  that  it  costs  from  3 
to  4  cents  to  produce  a  quart  of  milk.  The  result  is  that  the  busi- 
ness of  producing  milk  is  not  a  profitable  one  for  the  metropolitan 
market.  The  producer  has  no  voice  in  making  the  price  at  which 
he  may  sell  his  milk.  In  other  words,  if  he  sells  his  milk  in  the 


No.  45.]  11 

New  York  market,  it  must  be  at  the  price  fixed  by  the  "  Value 
Committee  "  of  the  Consolidated  Milk  Exchange  or  the  price  at 
which  Borden's  will  buy  milk  for  each  six  months.  If  there 
is  no  creamery  or  cheese  factory  close  to  the  producer,  he  has  no 
alternative  but  to  accept  the  prices  above  named,  unless  he  takes 
his  chance  of  sen-ding  milk  to  an  unknown  and'  oftentimes)  irre- 
sponsible dealer,  which  in  many  cases  means  the  entire  loss  of  his 
shipment. 

COST  OF  MILL  FEED  A  CHIEF  FACTOR  IN  THE  COST 
OF  THE  PRODUCTION  OF  MILK. 

The  testimony  shows  that,  for  at  least  eleven  years  last  past,  it 
took  1.7  pounds  of  mill  feed  throughout  the  year  to  produce  a 
quart  of  milk,  and  that  mill  feed  cost,  on  an  average,  for  the  same 
period  1.4  cents  a  pound.  That  is,  the  average  cost  of  mill  feed, 
during  this  period,  employed  in  the  production  of  milk,  was 
slightly  over  42  per  cent,  of  the  selling  price  of  milk  during  that 
period,  milk  during  that  period  having  averaged  2.99  cents  per 
quart.  Mill  feed  has  been  greatly  advancing  in  price  for  the  last 
twenty  years,  until  the  present  price  of  about  $3  per  ton  is  about 
double  what  it  cost  twenty  years  ago. 

AS  TO  A  COMBINATION  TO  FIX  THE  PEICE  TO  THE 

CONSUMER. 

On  November  1,  1909,  practically  all  the  dealers  in  bottled  milk 
in  the  city  of  New  York  raised  the  price  to  consumers  from  8  to  9 
cents  a  quart.  Much  testimony  was  introduced  showing  that  the 
dealers  had  for  a  month  or  two  previous  to  November,  1909,  con- 
sulted together  as  they  met  from  time  to  time  in  reference  to  wrhat 
they  termed  the  "  advisability  and  necessity  for  raising  the  price 
of  milk."  They  deny  that  any  specific  agreement  was  entered 
into,  but  some  dealers  admitted  that  they  had  urged  their  asso- 
ciates to  raise  the  price  of  milk  to  that  amount  at  that  time. 

In  connection  with  the  raising  of  the  price  of  milk  to  consumers 
the  testimony  developed  the  fact  that  an  organization  known  as 
the  Milk  Dealers'  Protective  Association  was  organized  under  the 
Membership  Corporation  Law  of  the  State  of  New  York  in  the 
month  of  October,  1895,  at  the  time  the  Consolidated  Milk  Ex- 


12  [SEX ATE 

change  was  organized  in  Xew  Jersey.  This  Milk  Dealers'  Pro- 
tective Association,  while  organized  ostensibly  as  a  club,  com- 
prised in  its  membership  a  large  number  of  the  dealers  in  the 
city  of  Xew  York.  The  evidence  tended  to  show  that  these  dealers 
did  sell  milk  to  stores  and  consumers  in  the  city  of  Xew  York  at  a 
uniform  price,  generally  38  cents  a  can  above  the  Exchange  price. 
The  purpose  of  this  organization  was  to  discourage  independent 
action  by  dealers  by  drastic  action  and  methods. 

The  evidence  showed  that  all  the  members  of  the  Mills,  Dealers- 
Protective  Association  endeavored  to  maintain  this  price,  and  if  an 
independent  dealer,  not  a  member  of  the  Association,  attempted 
to  sell  milk  at  a  lower  price  than  that  established  by  the  z\ssocia- 
tion,  what  was  known  as  the  kk  dead  "  wagon  was  started  after  him. 
The  peculiar  duty  of  this  "  dead  "  wagon  was  to  go  around  to  the 
customers  of  the  independent  dealer  and  to  offer- them  milk  at  a 
lower  price  than  the  independent  was  selling  at.  This  "dead  " 
wagon  was  maintained  and  supported  by  the  Milk  Dealers'  Pro- 
tective Association.  If  the  operations  of  the  "  dead  "  wagon  were 
not  successful  in  putting  an  independent  dealer  out  of  business,  an 
attempt  was  usually  made  to  cut  off  his  supply  of  milk  by  coer- 
cion, threats  or  influence  exerted  upon  the  party  who  was  supply- 
ing the  independent  with  milk,  sometimes  as  high  as  $1,500  being 
offered  to  the  party  supplying  the  independent  with  milk  if  he 
would  break  his  contract  with  the  independent  or  send  the  inde- 
pendent sour  milk  for  a  few  days. 

This  particular  feature  of  the  testimony  was  called  to  the  atten- 
tion of  the  district  attorney  of  Xew  York  county  by  Mr.  Coleman, 
my  deputy,  with  the  request  that  this  branch  of  the  case  be  pre- 
sented to  the  grand  jury,  which  was  done. 

The  above  testimony  warrants  the  conclusion,  almost  to  a  moral 
certainty,  that  an  agreement  was  made  and  an  understanding  had 
in  some  way  that  the  price  of  milk  should  be  raised  on  or  about 
the  1st  of  November.  In  view  of  the  fact  that  the  officers  of  each 
corporation  and  the  individual  milk  dealers  deny  the  existence  of 
any  such  agreement,  it  leaves  the  State  without  any  legal  evidence 
that  such  an  agreement  existed,  other  than  the  presumption  that 
would  follow  from  the  simultaneous  raise  of  the  price  by  nearly 
all  the  dealers  from  8  to  9  cent?. 


13 

I  believe  the  evidence  in  the  case  would  warrant  the  'bringing 
of  an  action  against  the  Consolidated  Milk  Exchange  for  the  can- 
cellation of  its  certificate  to  do  business  in  this  State,  and  f9r  an 
injunction  restraining  it  from  further  acts  within  this  State  in 
fixing  the  price  of  milk,  as  indicated  by  the  action  of  its  "  Com- 
mittee on  Values.5' 

Shortly  after  the'hearings  began  in  this  investigation  and  many 
of  the  facts  regarding  the  operation  of  the  Consolidated  Milk  Ex- 
change and  its  manner  of  fixing  prices  had  been  developed,  the 
officers  of  the  company  made  an  application  to  the  Secretary  of 
State  for  the  cancellation  of  its  license  and  to  voluntarily  be  per- 
mitted to  withdraw  from  the  State.  This  action  upon  their  part 
of  course  withdrew  the  corporation  from  the  jurisdiction  of  the 
courts  of  this  State. 

However,  some  of  the  constituent  or  integral  parts  of  the  Con- 
solidated Milk  Exchange,  viz.,  certain  stockholders,  directors  and 
officers,  are  within  this  jurisdiction,  and  they  are,  in  many  in- 
stances, dominant  factors  in  corporations  dealing  in  milk  in  this 
State.  The  price  established  by  the  Consolidated  Milk  Exchange 
is  utilized  by  these  directors  in  their  respective  corporations  in 
purchasing  milk.  These  directors,  at  meetings  of  the  Consolidated 
Milk  Exchange  held  in  Xew  Jersey,  pass  resolutions  that  'become 
effective  in  this  State,  and  it  may  be  feasible  to  start  proper  pro- 
ceedings to  prevent  these  individuals  from  participating  in  any 
act  which  ultimately  tends  to  the  creation  of  a  monopoly  in  a  com- 
mon necessity  of  life. 

PRICES  REDUCED. 

One  of  the  most  important  results  accomplished  was  the  reduc- 
tion of  the  price  of  milk  from  nine  cents  to  the  old  rate  of  eight 
cents.  This  was  undoubtedly  brought  about  by  the  severe  criticism 
visited  upon  the  dealers  in  milk,  the  general  agitation  produced  by 
the  investigation,  and  more  particularly  the  development  of  facts 
showing  that  the  raise  in  price  was  not  warranted. 

During  the  hearings  a  copy  of  all  the  evidence  taken  was  fur- 
nished to  the  district  attorney  of  Xew  York  county.  Upon  such 
evidence  a  special  grand  jury  summoned  on  February  28,  1910, 


14  [SENATE 

found  individual  and  blanket  indictments  against  eight  members 
of  the  board  of  directors  of  the  Consolidated  Milk  Exchange  for 
violating  the  provisions  of  the  Anti-Monopoly  Act. 

WAS  THE  RAISE  OF  THE  PRICE  OF  BOTTLED  MILK 
FROM  EIGHT  TO  NINE  GENTS  JUSTIFIED; 

An  attempt  was  made  by  the  dealers  to  justify  this  unanimous 
action  on  their  part  upon  the  ground  that  the  additional  cost  of 
milk  made  it  necessary.  While  it  is  true  that  the  dealers  began 
to  pay  a  little  more  for  milk  in  the  last  two  months  of  1909,  the 
average  price  paid  for  that  year  was  slightly  less  than  paid  during 
the  previous  year  to  the  producers.  The  increase  to  the  producer 
was  only  one-fourth  of  a  cent,  while  the  remaining  three-fourths 
of  a  cent  increase  was  retained  by  the  dealers. 

Furthermore,  an  examination  of  the  books  of  some  of  the  largest 
dealers  revealed  the  fact  that  enormous  profits  were  being  made  by 
the  milk  dealers.  According  to  the  information  gathered  by  Mr. 
Scudder,  the  expert  accountant,  one  company  showed  net  profits 
on  fluid  milk  alone,  sold  in  Now  York  and  Chicago  for  the  nine 
months  ending  September  30,  1909,  of  $779,407.92,  and  for  the 
corresponding  nine  months  during  tin-  year  1908,  of  $439,054.80, 
showing  that  during  the  same  period  in  1909  the  net  profits  on 
fluid  milk  alone,  in  New  York  and  Chicago,  increased  $340,353.12 
over  the  preceding  year.  This  company's  total  net  profits  for  the 
year  ending  September  30,  1909,  were  $2,617,02-9.40.  The  total 
capital  stock  of  this  company,  issued  and  outstanding  during  that 
year,  was  $2-5,000,000,  of  which  $15,48 8,408. 40  was  issued  for 
trade-marks,  patents  and  good  will.  This  company  during  the 
ten  years  of  its  existence  paid  nearly  every  year  a  dividend  of  6  per 
cent,  on  its  common  stock  and  during  that  time  has  succeeded  in 
rolling  up  a  surplus  of  $8,824,230.59  in  addition  thereto.  This 
same  company  showed  net  profits,  after  all  charges  and  expenses  of 
every  kind  and  nature  had  been  deducted,  on  fluid  milk  and  cream 
in  New  York  alone,  for  the  year  ending  June  30,  1909,  <  f  $682,- 
367.16,  and  this  was  on  an  investment,  as  shown  by  their  tax 
statement  filed  by  them  in  the  office  of  the  Comptroller  of  the  State 
of  New  York,  of  $4,890,487,  which  was  employed  in  the  fluid  milk 
and  cream  business  in  the  citv  of  New  York.  This  would  show 


Xo.  45.]  15 

a  net  return  to  this  company  011  this  branch  of  its  business  of  about 
14  per  cent,  during  the  year  ending  June  30,  1909,  whereas  dur- 
ing the  year  ending  June  30,  1908,  the  net  profits  of  this  same 
company  on  this  same  branch  of  its  business  amounted  to  $512,- 
243.89 ;  the  year  ending  June  30,  1909,  showing  an  increase  over 
the  previous  year  of  something  over  $170,000. 

Another  company,  which  was  incorporated  about  eight  years 
ago,  for  the  sum  of  $500,000  of  which  $200,000  was  issued  for 
tangible  assets  and  $300,000  for  good  will,  showed  that  the  net 
earnings  for  the  year  ending  February  i>s.  1909,  after  deducting 
all  charges  and  expenses  of  every  kind  and  nature,  'were  $221,- 
694.63,  and  further  showed  that  the  net  earnings  for  the  eight 
months  ending  October  31,  1909,  after  deducting  all  charges  and 
expenses  of  every  kind  and  nature,  were  $257,923.47,  which  is 
over  120  per  cent,  on  the  amount  originally  invested  in  this  com- 
pany eight  years  ago.  In  the  meantime,  this  same  company  has. 
paid  on  its  capital  stock  over  12  per  cent,  dividends  each  year,  the 
dividends  for  the  year  ending  December  31,  1909,  being  22  per 
cent,  and  it  has  in  addition  rolled  up  a  surplus  of  $962,627.02'. 

These  are  only  two  of  the  instances  which  show  that  the  raise 
in  price  from  8  to  9  cents  a  quart  for  bottled  milk  to  the  consumers 
about  November  1,  1909,  was  not  justified,  either  by  the  increase 
in  price  paid  to  the  producer  for  milk  or  by  the  increased  cost 
in  handling,  the  evidence  she  wing  that  the  enormous  profits  rea- 
lized in  the  year  1908  were  greatly  exceeded  by  those  realized  in' 
the  year  1909,  the  year  in  which  the  price  to  the  consumer"  was 
raised. 

It  is  only  fair  to  say  that  the  small  dealers  made  no 'such 'profits, 
for  the  reasons,  first,  that  it  costs  more 'to  handle  milk  per  quart 
in  small  quantities  than  in  large,  and  the  aggregate  profits  on 
small  sales  are,  of  course,  limited. 

CAPACITY  OF  MILK  BOTTLES. 

During  the  investigation  it  was  charged  that  some  dealers  were 
selling  milk  in  bottles  represented  as  containing  a  quart  of  milk, 
when  in  fact  they  contained  considerably  less.  This  is  a  matter 
that  should  also  receive  attention  from  the  Legislature.  Legisla- 
tion should  be  enacted  requiring  all  bottles  used  for  holding  milk 


16  [SENATE 

sold  in  this  State  to  be  plainly  stamped  in  marks  blown  into  the 
glass  with  the  number  of  quarts  or  pints  that  each  bottle  holds, 
together  with  the  name  of  the  maker  of  such  bottle.  It  should  be 
further  made  a  misdemeanor  for  any  maker  of  such  bottle  to  so 
stamp  a  false  measure  on  the  bottle  and  a  misdemeanor  for  any 
dealer  to  sell  milk  in  bottles  not  so  stamped  or  falsely  stamped. 

REMEDIES.- 

Milk  is  one  of  the  necessaries  of  life.  Any  condition  or  circum- 
stances, the  result  of  an  agreement  or  otherwise,  which  lessens  the 
supply  or  raises  the  price  of  milk  or  which  tends  to  place  beyond 
the  reach  of  the  poor  an  adequate  supply  of  pure  and  wholesome 
milk,  creates  an  intolerable  condition,  for  which  a  remedy  must  be 
found. 

The  several  States  have  enacted  what  are  commonly  called 
anti-monopoly  laws.  The  purpose  of  these  laws  is  to  restrain  mo- 
nopoly and  prevent  an  interference  with  competition.  To  a  great 
extent  these  statutes  have  not  brought  the  relief  hoped  for.  Manu- 
facturers and  middlemen  have  learned  the  groat  advantages  that 
come  from  agreements  or  understandings  wrhich  eliminate  competi- 
tion. 

These  understandings  need  not  be  in  writing  or  formally  made. 
They  may  be  in  the  form  of  what  is  known  as  an  understanding 
or  a  "  gentlemen's  agreement."  It  is  practically  impossible  to 
frame  a  law,  no  matter  how  stringent,  which  will  reach  the  so- 
called  "  gentlemen's  agreement." 

Dealers  in  a  certain  article  have  only  to  discuss  the  conditions 
of  their  business  at  the  club  or  at  noonday  lunch.  They  learn 
from  each  other  what  the  judgment  of  the  majority  is  as  to  prices. 
They  know  that  a  formal  agreement  is  in  restraint  of  trade  and 
in  violation  of  the  average  anti-monopoly  law.  The  prices  fixed 
are  called  their  judgment  of  values,  and  as  a  result  they  can  take 
the  stand  and  testify  that  there  was  no  agreement  between  them 
upon  the  subject  of  valuation  or  price.  Such  action  is  just  as  ef- 
fective as  a  formal  agreement  would  be.  It  accomplishes  the  same 
purpose,  and  at  the  same  time  enables  them  to  satisfy  their  con- 
sciences by  swearing  that  there  was  no  formal  or  other  kind  of  an 
agreement  made.  The  laws  enacted  for  the  purpose  of  restrain- 


No.  45.]  17 

ing  monopoly  and  fostering  competition  should  be  continued,  but 
it  is  self-evident  that  the  almost  insurmountable  obstacle  to  over- 
come is  the  obtaining  of  legal  evidence  of  the  existence  of  the 
"gentlemen's  agreement."  Because  of  this,  it  is  necessary,  espe- 
cially in  the  case  of  a  necessity  of  life,  for  the  State  to  go  further 
and  undertake  to  -regulate  the  prices  which  middlemen  and 
dealers  may  charge  for  and  profits  they  may  make  from  dealing  in 
articles  of  common  necessity  such  as  milk. 

In  the  case  of  combinations  to  fix  the  price  of  certain  commodi- 
ties, such  as  steel  rails,  etc.,  railroad  companies  and  large  con- 
sumers are  iii  a  position  to  fight  such  combinations.  Large,  single, 
individual  consumers  of  any  product  may,  before  submitting  to 
extortion,  proceed  to  manufacture  the  product  themselves,  but  the 
individual  consumer  of  milk  cannot  buy  or  rent  a  dairy  farm. 
They  are  so  scattered  that  it  is  impossible  for  them  to  combine  in 
purchasing  what  might  be  called  a  co-operative  dairy.  The  plain 
duty  of  the  'State,  acting  for  the  people,  is  to  regulate  the  milk 
traffic  so  that  the  consumer  and  producer  will  not  be  at  the  mercy 
of  the  middleman.  The  highest  duty  which  the  State  has  to  per- 
form is  to  protect  the  public  from  imposition  and  wrongdoing. 
Public  service  corporations  may  be  limited  in  the  rates  they 
charge.  The  price  of  gas  and  grain  elevator  charges  have  been 
fixed  by  law.  The  reason  for  this  is  to  protect  the  public  from  ex- 
tortion. Public  service  corporations  enjoy  special  franchises  from 
the  State  which  may  become  a  monopoly,  but,  as  we  have  seen,  a 
monopoly  can  be  created  as  effectually  through  a  "  gentlemen's 
agreement  "  as  by  the  granting  of  a  special  franchise.  This  being 
so,  govermental  regulation  would  seem  the  only  remedy  to  protect 
the  people  from  this  sort  of  monopoly.  The  State  might  regulate 
the  maximum  prices  for  milk  which  can  be  sold  to  the  consumer, 
see  that  an  adequate  supply  of  milk  is  available  for  the  State's  in- 
habitants, and  that  reasonable  prices  are  paid  to  the  producer  for 
milk. 

By  legislative  enactment,  it  might  be  declared  that  certain  ar- 
ticles, such  as  milk,  flour,  coal,  ice  and  meat,  are  articles  of  com- 
mon necessity.  A  commission  could  be  provided  for,  to  be  ap- 
pointed by  the  Governor,  the  members  of  which,  if  practicable, 
to  be  suggested  by  members  of  boards  of  trades  in  cities  and  the 


18  [SENATE 

State  Grange.  No  member  of  such  commission  should  be  per- 
mitted to  be  engaged  or  interested  in  the  business  of  trafficking  or 
dealing  in  the  articles  enumerated  as  common  necessities.  The 
act  should  further  provide  that  any  corporation  intending  to  deal 
or  traffic  in  these  common  necessities  of  life  should  procure  a  li- 
cense to  carry  on  such  business.  The  commission  should  be  given 
plenary  power  to  inquire  into  all  the  affairs  of  those  engaged  in 
the  business,  with  power  of  subpoena,  and  be  vested  with  the  right 
to  obtain  full  information  upon  all  subjects  pertaining  to  the  busi- 
ness, so  as  to  enable  the  commission  to  perform  its  duties.  This 
commission  should  have  the  power  to  fix  the  prices  or  profits  which 
may  be  charged  or  made,  over  and  above  the  price  paid  to  the  pro- 
ducer, with  the  power  to  regulate  the  producer's  price  also.  If 
the  dealer  is  confined  to  a  certain  profit,  the  incentive  to  fix  an 
unreasonable  price  upon  the  producer  is  largely,  if  not  wholly,  re- 
moved. 

Effective  organization  or  community  of  effort  can  produce  and 
distribute  any  article  of  common  necessity  cheaper  than  the  indi- 
vidual. Therefore,  organization,  in  and  of  itself,  by  reason  of  the 
fact  of  the  cheapening  of  articles  of  common  consumption,  is  not 
the  primary  evil,  but  it  is  the  abuses  of  organization,  such  as 
raising  prices  after  competition  has  been  stifled,  with  which  the 
State  must  deal. 

The  old  legal  maxim,  "  there  is  no  wrong  without  a  remedy,"  is 
f-till  in  force.  Concededly  this  investigation  discloses  that  a  posi- 
tive wrong  exists,  and  the  paramount  duty  for  the  State  is  to  find 
a  remedy  for  that  wrong. 

The  congestion  of  population  in  our  cities  has  given  rise  to  new 
conditions  in  our  industrial  and  economic  life.  Articles  of  com- 
mon consumption,  such  as  milk,  flour,  coal,  ice  and  meat,  that 
formerly,  under  the  law  of  supply  and  demand,  reached  the  con- 
sumer at  a  fair  price,  have  become  the  subject  of  monopoly, 
through  organization  and  combination  between  middlemen.  Deal- 
ing in  these  articles  of  common  necessity  might  be  regulated  by 
the  government  if  such  regulation  shall  be  found  to  be  im- 
practicable, it  wrill  furnish  a  new  and  powerful  argument  for 
municipal  ownership,  and  municipalities  will  ask  for  legislative 
authority  to  undertake  the  distribution  of  these  common  necessi- 


-No.  45.]  19  • 

ties  of  life  among  their  citizens.  It  will  not  do  to  argue  that  there 
is  no  remedy.  Such  a  contention  would  be  a  confession  that  our 
form  of  government  is  a  failure,  and  the  people  in  these  great 
centers  of  population  will  'become  the  victims  of  the  greedy  and 
rapacious,  who  are  able  under  present  conditions  to  prey  upon  the 
producer  and  consumer  with  impunity. 

All  of  which  is  respectfully  submitted, 

EDWARD  E.  O'MALLEY, 

Attorney-General. 
Dated,  Albany,  X.  Y.,  April  25,  1910. 


SUPREME  COURT  OF  NEW  YORK 
COUNTY  OF  NEW  YORK. 


"1 
IN  THE  MATTER 


OF 


The  Petition  of  Edward  R.  O'Malley, 
Attorney-General  of  the  State  of  New 
York,  for  an  order  directing  Charles 
H.  C.  Beakes  and  others  to  appear  be- 
fore a  Referee  for  examination,  pur- 
suant to  Article  22  of  Chapter  20  of 
the  Consolidated  Laws  of  the  State 
of  New  York,  known  as  the  General 
Business  Law. 


Synopsis  of  Testimony  Taken  Before  William  Grant  Brown, 
Referee,  and  a  Digest  of  Information  Obtained  by  the 
Referee  from  Official  Scientific  Reports  from  Various 
Countries,  Letters  and  Suggestions  from  Practical  and 
Scientific  Men. 

Referee  appointed  on  the  6th  day  of  December,  1909,  by  Hon. 
Samuel  Seabury,  Justice  of  the  Supreme  Court  of  the  State  of  New 
York. 


I  SKXATE,  No.  4-5.] 


SUPREME    COURT    OF    NEW    YORK 
COUNTY  OF  NEW  YORK. 


IN  THE  MATTER 


OF 


The  Petition  of  Edward  R.  O'Malley. 
Attorney-General  of  the  State  of  New 
York,  for  an  order  directing  Charles 
H.  C.  Beakes  and  others  to  appear  be- 
fore a  Referee  for  examination,  pur- 
suant to  Article  22  of  Chapter  20  of 
the  Consolidated  Laws  of  the  State 
of  New  York,  known  as  the  General 
Business  Law. 


SYNOPSIS  OF  TESTIMONY  TAKEN  BEFORE  WILLIAM  GRANT  BROWN, 
REFEREE,  AND  A  DIGEST  OF  INFORMATION  OBTAINED  BY  THE 
REFEREE  FROM  OFFICIAL  SCIENTIFIC  REPORTS  FROM  VARIOUS 
COUNTRIES,  LETTERS  AND  SUGGESTIONS  FROM  PRACTICAL  AND 
SCIENTIFIC  MEN. 

The  Milk  Exchange,  Limited,  will  be  referred  to  as  the  "  Ex- 
change Limited,"  and  the  Consolidated  Milk  Exchange,  Limited, 
will  be  referred  to  as  "  The  Consolidated." 

The  "  Exchange  Limited  "  was  organized  on  the  21st  day  of 
October,  1882,  under  chapter  611  of  the  Laws  of  1875,  entitled 
"An  act  to  provide  for  the  organization  and  regulation  of  certain 
business  corporations/'  with  a  capital  stock  of  ten  thousand  dollars 
($10,000),  with  the  following  named  gentlemen  as  incorporators  or 
original  subscribers  to  the  capital  stock: 

George  Slaughter,  John  W.  Tayntor,  George  Conklin,  Charles  H. 
C.  Beakes,  Robert  F.  Stevens,  Thomas  O.  Smith,  R.  R.  Tone, 
W.  A.  Wright,  P.  E.  Sanford,  J.  D.  Miller,  Joseph  Laemmle,  G.  0. 
Omsted,  T.  J.  Tuthill  and  Jesse  Durland. 

The  purpose  of  the  corporation,  as  expressed  in  the  charter,  was: 

11  The  object  and  nature  of  the  business  for  which  said  corpora- 


24  [SENATE 

tion  is  to  be  formed  is  the  binding  and  selling  of  milk  at  wholesale 
and  retail,  the  purchase  of  dairies  of  milk  when  deemed  advisable 
and  the  sale  of  same  to  milk  dealers."  . 

The  charter  also  provided  as  follows: 

"  The  number  of  shares  of  which  said  capital  stock  shall  consist 
to  be  four  hundred  shares  of  twenty-five  dollars  each  issued  subject 
to  the  requirements  of  the  By-laws." 

On  or  about  the  16th  day  of  January,  1891,  an  action  was  com- 
menced by  the  Attorney-General  of  the  State  of  New  York,  Hon. 
Charles  F.  Tabor,  in  the  name  of  trie  People  of  the  State  of  New 
York  against  the  "  Exchange  Limited,"  and  the  relief  sought  was: 
First,  nonuser;  second,  an  unlawful  and  illegal  combination  and 
conspiracy  made  in  restraint  of  trade  to  limit  the  supply  of  milk 
and  to  fix  and  control  the  price  thereof  in  the  city  of  New  York 
and  elsewhere,  and  on  or  about  the  1st  day  of  May,  1895,  the 
"  Exchange  Limited  "  was  dissolved  by  a  decree  of  the  Supreme 
Court  made  and  entered  in  the  office  of  the  Clerk  of  the  county  of 
Broome,  State  of  New  York. 

In  the  opinion  written  by  Judge  Haight  for  the  Court  of  Appeals 
the  statement  of  facts  as  they  appeared  in  the  case  is  as  follows: 

"  It  appears  that  the  Milk  Exchange  when  organized,  or  shortly 
thereafter,  had  ninety  odd  stockholders,  a  large  majority  of  whom 
were  milk  dealers  in  the  city  of  New  York  or  creamery  or  milk 
commission  men  doing  business  in  that  vicinity;  that  at  the  first 
meeting  of  the  exchange  after  its  incorporation,  the  following, 
among  other  by-laws,  was  adopted:  '  The  board  of  directors  shall 
have  the  power  to  make  and  fix  the  standard  or  market  price  at 
which  milk  shall  be  purchased  by  the  stockholders  of  this  company 
and  to  declare  the  stock  of  any  and  every  stockholder  herein  who 
purchases  milk  at  any  other  than  the  price  so  named  by  the  board, 
forfeited,  subject  to  the  conditions  set  forth  in  article  3,  sections  4 
and  5,  of  these  by-laws.  All  stock  so  forfeited  by  said  board  of 
directors  shall  be  subject  to  the  order  of  the  board  of  directors  and 
shall  be  disposed  of  they  direct.'  This  by-law-remained  in  force 
for  a  number  of  years  and  until  after  there  wras  an  investigation 
as  to  the  character  and  nature  of  the  defendant's  business  and  a 
report  made  by  a  committee  of  the  Senate.  The  by-law  was  then 
amended  by  striking  out  that  part  thereof  which  authorized  the 
forfeiture  of  the  stock  of  a  stockholder  who  purchased  milk  at 
another  price  than  that  fixed  by  the  Exchange.  It  was  again 
amended  in  April,  1890,  but  that  part  thereof  which  provided  that 
the  board  of  directors  shall  have  the  power  to  determine  and  fix 


No.  45.]  25 

from  time  to  time  the  Exchange  price  of  milk  was  retained.  Acting 
upon  these  by-laws  the  defendant's  board  of  directors  have  from 
time  to  time  during  its  corporate  existence  fixed  the  price  of  milk 
to  be  paid  by  dealers,  and  the  prices  so  fixed  have  largely  con- 
trolled the  market  in  and  about  the  city  of  New  York  and  of  the 
milk-producing  territory  contiguous  thereto. 

"  These  facts  are  significant,  and  we  are  unable  to  escape  the  con- 
viction that  there  was  a  combination  on  the  part  of  the  milk 
dealers  and  creamery  men  in  and  about  the  city  of  New  York  to 
fix  and  control  the  price  that  they  should  pay  for  milk.  Was  this 
lawful?" 

145  N.  Y.  269. 

"  The  Consolidated  "  was  organized  under  the  Corporation  Laws 
of  the  State  of  New  Jersey  on  or  about  the  15th  day  of  November, 
1895,  with  a  capital  stock  of  twenty-five  thousand  dollars  ($25,000), 
with  the  following  named  gentlemen  as  incorporators: 

John  A.  McBride,  J.  E.  Wells,  Thomas  B.  Harbison,  Charles 
H.  C.  Beakes,  William  C.  A.  Witt,  M.  L.  Sanford,  J.  V.  Jordon, 
Fred  H.  Beach,  John  P.  Wierck,  George  A.  Slaughter  and  William 
A.  Wright, 

The  names  and  places  of  residence  of  the  stockholders  and  num- 
ber of  shares  held  by  each,  as  appear  in  said  original  articles  of 
incorporation  of  "  The  Consolidated,"  are  as  follows: 

Frederick  H.  Beach..  .  .  Dover,  N.  J 1  share. 

Daniel  Bailey Glenwood,  N.  J 5  shares. 

John  A.  McBride Quarry ville,  N.  J 5  shares. 

Charles  H.  C.  Beakes  .  .  Orr's  Mills,  N.  Y 5  shares. 

Thomas  H.  Harbison  .  .  Philadelphia,  Pa 5  shares. 

I.  C.  Jordan Middletown,  N.  Y 5  shares. 

Joseph  Laemmle New  York  city 5  shares. 

Joseph  V.  Jordan Newburgh,  N.  Y 5  shares. 

George  Slaughter Campbell  Hall,  N.  Y 5  shares. 

Milton  L.  Sanford Warwick,  N.  Y 5  shares. 

W.  C.  A.  Witt New  York  city .  5  shares. 

James  E.  Wells Chester,  N.  Y 5  shares. 

William  A.  Wright ....  Brooklyn,  N.  Y 5  share's. 

George  Roe Augusta,  N.  J 5  shares. 

•John  P.  Wierk Brooklyn,  N.  Y  .  .  . 5  shares. 

Thomas  0.  Smith New  York  city 4  shares. 


26  [SENATE 

Articles  "  Second  "  and  "  Sixth  "  of  the  charter  of  "  The  Con- 
solidated 7;  are  as  follows: 

"  Second.  That  the  places  in  this  State  where  the  business  of 
such  company  is  to  be  conducted  are  Jersey  City  and  such  places 
in  the  counties  of  Sussex,  Morris,  Essex  and  counties  adjacent 
thereto,  as  the  business  of  the  company  may  warrant.  The  prin- 
cipal part  of  the  business  of  said  corporation  within  this  State  is 
to  be  transacted  at  Jersey  City,  and  the  places  out  of  this  State 
where  the  same  is  to  be  conducted  and  where  the  corporation 
proposes  to  carry  on  operations  are  the  cities  of  New  York  and 
Brooklyn,  and  such  other  places  in  the  State  of  New  York  and 
other  States  of  the  United  States  or  foreign  countries  as  may  from 
time  to  time  be  advisable.  And  that  the  objects  for  which  this 
corporation  is  formed  are:  To  foster  and  promote  trade  and  com- 
merce in  dairy  products;  to  deal  in  milk  and  dairy  products  when- 
ever it  can  be  done  advantageously;  to  act  as  a  commission  merchant 
for  the  sale  of  milk  and  other  dairy  products,  and  also  as  agent  for 
farmers,  producers  and  shippers  for  the  sale  of  their  dairy  products 
at  any  time  and  from  time  to  time  whenever  such  business  can  be 
done;  to  collect  and  diffuse  accurate  and  reliable  information 
among  its  stockholders  and  members  as  to  the  standing  of  mer- 
chants, producers,  dealers,  consumers  and  others  engaged  in  any 
way  in  purchasing  or  selling  milk,  cream  or  other  dairy  products 
or  as  to  any  and  all  other  matters  of  importance  or  interest  to  its 
members  and  the  trade;  to  collect  and  preserve  for  the  benefit  of 
its  stockholders,  members  and  others,  statistics  and  other  informa- 
tion in  regard  to  any  matters  connected  with  or  relating  to  the  trade 
in  milk  and  dairy  products,  to  promote  uniformity  and  certainty 
in  the  customs  and  usages  of  the  trade  and  a  more  enlarged  and 
friendly  intercourse  between  producers,  merchants  and  business 
men  engaged  or  in  any  way  interested  in  dairy  products." 

"  Sixth.  Annual  payments  or  dues  may  be  required  of  each 
member  of  the  corporation  at  such  times  and  to  such  amounts  as 
the  By-laws  may  from  time  to  time  provide,  and  no  certificate 
of  the  capital  stock  and  no  shares  of  the  capital  stock  of  this  cor- 
poration shall  be  transferable  or  be  transferred  so  long  as  the 
holder  or  holders  thereof  shall  be  in  default  in  the  payment  of  any 
annual  dues  or  otherwise  indebted  to  the  corporation.  No  person 
to  whom  stock  shall  be  transferred  shall  be  entitled  to  vote  at  any 
meeting  or  to  any  of  the  rights  and  privileges  or  a  member  of  the 
corporation  until  he  has  been  duly  elected  a  member  thereof  by 
the  Board  of  Directors,  or  in  such  manner  as  the  By-laws  may 
provide. 


Ko.  45.]  27 

"  Certificates  of  stock  shall  be  issued  only  for  par,  and  only  upon 
the  receipt  by  the  treasurer  of  the  full  amount  of  their  par  value 
thereof  in  cash  or  property  purchased  as  provided  by  law,  and  no 
subscriber  to  the  capital  stock  or  stockholder  or  member  of  the 
corporation  shall  be  entitled  to  vote  at  any  election  or  meeting  of 
the  corporation  upon  any  shares  upon  which  any  installment  or 
assessment  called  for  by  the  Board  is  and  has  been  unpaid  for 
thirty  days  preceding  such  election  or  meeting.  No  member  or 
stockholder  who  is  in  default  in  the  payment  of  any  annual  dues 
as  provided  for  in  the  By-laws,  shall  be  entitled  to  vote  at  any 
election  or  meeting  of  the  corporation. 

"  Upon  each  subscription  to  the  capital  stock,  at  least  ten  per  cent, 
of  the  par  value  thereof  shall  be  paid  in  cash  by  the  subscriber  at 
the  time  of  making  the  same;  the  remainder  shall  be  paid  at  such 
time  or  times  and  in  such  installments  as  shall  be  fixed  by  the 
Board  of  Directors  within  the  limits  prescribed  by  law.  If  default 
shall  be  made  by  any"  member  or  subscriber  to  the  capital  stock, 
in  the  payment  of  any  installment  or  assessment  upon  any  share 
or  shares  of  stock  when  called  for  by  the  Board  of  Directors,  the 
Board  of  Directors,  in  addition  to  the  remedies  provided  for  such 
case  by  the  laws,  may  at  its  option  take  proceedings  in  the  name  of 
the  corporation  by  action  at  law  against  any  subscriber  or  person 
so  in  default,  to  recover  the  amount  of  any  installment  or  assess- 
ment remaining  unpaid  after  the  expiration  of  thirty  days  from 
the  date  fixed  for  such  payment,  or  may  declare  the  stock  and  all 
previous  payments  thereon  forfeited  after  the  expiration  of  sixty 
days  from  the  service  on  the  defaulting  stockholder  personally,  or 
by  mail  directed  to  him  at  his  post-office  address  as  given  by  him 
at  the  time  of  making  his  subscription  to  the  capital  stock,  of  a 
written  notice  requiring  him  to  make  payment  within  thirty  days 
from  the  service  of  such  notice,  at  the  office  of  the  company,  or  at 
a  place  or  to  a  person  named  in  said  notice,  and  stating  that  in 
case  of  failure  to  do  so,  his  stock  and  all  previous  payments  thereon 
will  be  forfeited  for  the  use  of  the  corporation." 

The  list  of  the  members  of  "  The  Consolidated  "  on  January  14, 
1909,  is  as  follows: 

NAME.  Address.  Shares. 

C.  H.  C.  Beakes 206  East  12th  st.,  New  York 61 

I.  C.  Jordon Middletown,  N.  Y  . 59 

Edward  B.  Sanford Warwick,  N.  Y 50 

Wm.  A.  Wright 69  Leffert's  place,  Brooklyn 30 

Joseph  V.  Jordan .....     Newburgh,  N.  Y 30 


28  [SENATE 

NAME.  Address.  Shares. 

Sandford  Dairy  Co  ....  138  West  31st  st.,  New  York 26 

John  P.  Wierck 502  Broadway,  Brooklyn 25 

Walter  R.  Comfort ....  32-34  New  Chambers  st.,  N.  Y.  .  .  25 

Thomas  O.  Smith 872  Sixth  ave.,  New  York 24 

Joseph  Laemmle 202  Bleecker  st.,  New  York 23 

George  Ihnken 194  19th  st.,  Brooklyn 20 

Fred  E.  Seiler 272  Plane  st.,  Newark,  N.  J 16 

Alexander  Campbell.  .  .  802  Fulton  st.,  Brooklyn 15 

Wm.  A.  Lawrence Chester,  N.  Y 15 

Chas.  E.  Seiler 272  Plane  st.,  Newark,  N.  J 14 

I.  Windsor  Farist Bridgeport,  Conn 12^ 

John  A.  McBride Sussex,  N.  J 12 

H.  F.  Hunteman 611-613  East  12th  st,,  New  York.  12 

W.  B.  Conklin 146  West  25th  st.,  New  York  ....  10 

Dennis  Reardon 59  Montgomery  st.,  Jersey  City.  .  10 

W.  H.  Bennett Goshen,  N.  Y  ." .'.  .  10 

E.  D.  Pierson Little  Britain,  N.  Y 10 

H.  M.  Schloss 1759     Richmond     terrace,     West 

New  Brighton,  S.  I 10 

James  A.  Howell 144-154  Provost  st.,  Jersey  City.  .  10 

W.  A.  Wells Goshen,  N.  Y 71 

F.  H.  Herkstroter 83  Cumberland  st.,  Brooklyn 7£ 

James  C.  Rider Central  Valley,  N.  Y 6 

R.  B.  Baker 591  Second  ave.,  New  York 6 

Daniel  Bailey Glenwood,  N.  J 5 

Richard  Bull Campbell  Hall,  N.  Y 5 

W.  H.  Bennett 20-22  Bridge  st.,  Newark,  N.  J. .  .  5 

David  Bleier 520  East  72d  st.,  New  York 5 

H.  S.  Chardavoyne.  .  .  .  406  Court  st.,  New  York .  . 5 

Alfred  Ely,  attorney. .  .  31  Nassau  st.,  New  York 5 

Thomas  B.  Harbison  .  .  2015  Dreer  st.,  Phila.,  Pa 5 

Kate  Shea 855  West  End  ave.,  New  York  .  .  5 

C.  Ebenezer  Johnson .  .  Goshen,  N.  Y 5 

Christ  Jetter 78  Perry  st.,  New  York 5 

Monroe  Dairy  Co 802  Fulton  st.,  Brooklyn 5 

D.  D.  Munson Franklin,  N.  J 5 

N.  H.  Margarum Stockholm,  N.  J 5 

Wm.  E.  Rogers ,  .  Carlton  ave.  &  Pacific  st.,  Bklyn  .  .  5 

Wm.  E.  Rogers  &  Co .  .  Carlton  ave.  &  Pacific  st.,  Bklyn .  .  5 

Henry  Rauch 21-27  Garden  st.,  Brooklyn 5 

John  Jetter. .  439  Hudson  st.,  New  York. .  5 


'No.  45.]  29 

NAME.  Address.  Shares. 

Webb  Harrison Middletown,  N.  Y 5 

W.  H.  Strong Goshen,  N.  Y 5 

Geo.  Slaughter Third  ave.  and  Bergen  st.,  Bklyn .  .  5 

John  H.  Stellmann .  .  .  .  123  Franklin  ave.,  Brooklyn.  ....  5 

R.  H.  Taylor .  .  : 202  Fifth  ave.,  Brooklyn 5 

Christ  Vagts 405a  McDonough  st.,  Brooklyn. .  .  5 

W.  Weber 139  West  96th  st.,  New  York 5 

Henry  Youngs Goshen,  N.  Y 5 

F.  B.  Sanford,  attorney  141  Broadway,  New  York 5 

Stephen  I.  Webb Campbell  Hall,  N.  Y 5 

Reid  Ice  Cream  Co ....  858  Fulton  st.,  Brooklyn,  N.  Y.  .  .  2J 

Dairymen's  Mfg.  Co  ...  Warren  Bay  &  Morgan  sts.,  Jersey 

City.  — 2 

L.  L.  Campbell  &  Bro.  .  534-536  West  48th  st.,  New  York  2 

Standard  Butter  Co  ...  Oswego,  N.  Y. H 

Frederick  H.  Beach. .  .  .  Morristown,  N.  J 1 

B.  Howell Goshen,  N.  Y 1 

Herman  Kern 907  Avenue  D,  Bayonne,  N.  J .  .  .  .  1 

E.  A.  Decker Sussex,  N.  J 1 

M.  L.  Sanford Warwick,  N.  Y 17^ 

Geo.  E.  Beakes Middletown,  N.  Y , 5 

E.  J.  Preston Amenia,  N.  Y 5 

H.  A.  Robinson 44  Boerum  pi.,  Brooklyn,  N.  Y. . .  5 

Newman  Hall Sussex,  N.  J 2 

Samuel  Levy 47  Forsyth  st.,  Brooklyn,  N.  Y. .  .  2 

The  N.  J.  Zinc  Co Franklin,  N.  J .  2 

Anton  Koster 860  Tenth  ave.,  New  York 1 

J.  R.  Stoll Newton,  N.  J .  1 

C.  A.  Wilson Sussex,  N.  J 1 

James  Roof Newton,  N.  J 1 

Peter  M.  Roof Halsey,  N.  J 1 

G.  V.  Armstrong Papakating,  N.  J 1 

A.  Talman Ogdensburg,  N.  J 1 

R.  V.  Armstrong Papakating,  N.  J 1 

John  Keogh 13  Catharine  st.,  New  York £ 

Hovey,  Clarke  &  Co.  .  .  Bainbridge,  N.  Y 

The  following  gentlemen  were  incorporators  of  the  "  Exchange 
Limited"  and  incorporators  or  members  of  "The  Consolidated:" 

George  Slaughter,  Charles  H.  C.  Beakes,  Thomas  O.  Smith, 
W.  A.  Wright  and  Joseph  Laemmle. 

Alfred  Ely  was  attorney  for  both  corporations. 


30  [SEXATE 

FARMERS. 


NAME. 

Harry  Vail  ...........................     44,000  3.4 

Andrew  J.  Nicoll  ......................     80,000  3.00 

William  H.  Strong  ....................     95,000  3.25 

Henry  Stephen  ......................................... 

John  Pettys  ..........................     35,000  3.50 

James  C.  Ryder  ......................................... 

Isaac  C.  Blandy  ....................  :  ............         -  4  .  25 

Almon  R.  Eastman  ..............................  4  .  00 

William  A.  Mather  ...................................... 

Oscar  Hale  .....................................  3  .  00 

George  H.  Greaves  ....................     58  ,  400  3  .  00 

Edward  K.  Parkinson  ...........................  4  .  79 

6,000  Ibs.  5.28 

6,220  Ibs.  4.79 

7,000  Ibs.  4.53 

7,500  Ibs.  4.22 

8,000  Ibs.  3.96 

9,000  Ibs.  3.50 

Average  ........................................  4  .  38 

Milton  Sanford  .......................................... 

Edward  J.  Brown  .....................      47,  152  2.  75 

Delos  Axtell  ....................................  3  .  50 

Isaac  Magoon  .........................     38,950  3.00 

Henry  Young  ...................................  4  .  00 

Rufus  Wikoff  .........................      63,763  3.20 

Albert  J.  Moe  ........................................... 

William  A.  Wells  ........................................ 

William  P.  Richardson  ...........................  4.00 

William  C.  Bennett  ....................    146,000  4.00 

Benjamin  F.  Livingston  ..........................  3.50 

Stuart  S.  Comfort  .....................      50,383  3.00 

Benton  Howell  ......................................  .... 

Charles  F.  Multon  .....................     90,000  3  .  20 

Will  E.  Kay  ..........................     83,618  3.50 

H.  LaMott  Locke  ...............................  3  .  25 

Herbert  E.  Cooke  .....................    180,000  4.00 

George  M.  Brown  ...............................  3  .  33 

Charles  Johnson  .......................    116,800  3.00 

Frank  Bander  ........................    136,000 

Average  price  per  quart  ..........................  3  .  513 


!No.  45.] 


31 


STATEMENT  OF  MILK  DELIVERED  IN  NEW  YORK  CITY  DURING  THE 
FARM  YEARS  (INCLUDING  CREAM  AND  CONDENSED  MILK)  IN 
CANS  OF  FORTY  QUARTS  EACH. 

Compiled    from    monthly  reports    by  the    railroad  companies  by 


Alfred  Ely. 


Farm  vear  Anril  1  to  March 


Total  cans  of 
40  quarts. 


Average  price 
farmers  based 


tn  quaiis. 

values. 

Cents. 

1895-1896  

8,117,372 

22,237 

.0253 

1896-1897  

8,317,842 

22,728 

.0230 

1897-1898  

8,807,565 

24,102 

.0234 

1898-1899  

9,235,596 

25,303 

.0240 

1899-1900  

9,593,007 

26,210 

.0262 

1900-1901  

9,865,974 

27,031 

.0271 

1901-1902  

10,344,175 

28,340 

.0273 

1902-1903  

10,827,326 

29,664 

.0294 

1903-1904  

11,613,859 

31,732 

.0278 

1904-1905  

12,315,642 

33,741 

.0283 

1905-1906  

13,391,891 

36,590 

.0289 

1906-1907  

14,719,940 

40,328 

.0305 

1907-1908  

15,175,888 

41,463 

.0341 

1908-1909  

15,303,208 

41,926 

.0327 

1909-1910.. 

DEALERS. 

COST  OF  DELIVERY. 
WILLIAM  B.  CONKLIN: 

It  costs  us  on  an  average  for  bottled  milk  at  the  present  time 
four  and  one-quarter  cents,  that  is  in  the  country. 


Freight 

Bottling 

Carting 

Delivery  by  man  to  the  consumer 

Office  help  and  extra  riders 


Total 


$0.0125 
.0075 
.0025 
.0125 
.0150 

$0 . 0925 


This  does  not  include  wagon  repair,  ext.ua  bottles  or  rent.  In 
June  the  lowest  price  at  which  we  have  been  able  to  buy  milk  is 
two  and  one-half  cents. 


32  [SENATE 

PRICES  PAID  TO  THE  PRODUCERS  FOR  MILK  AT  PRICE'S 
STATION,  N.  J. 

Cents 
1907.  per  quart. 

April.  .  ! 3i 

May 3  2J 

June 2§ 

July 2^-2J 

August 3-3  J 

September 3f-3f 


Average  for  six  months .03 


per  cwt. 

October $1.80 

November 2 . 00 

December 2 . 00 

1208. 

January 2.00 

February 2 . 00 

March  .  1 . 80 


Average  for  six  months $1 . 933 


April $1.60 

May 1.30 

June 1.10 

July 1.25 

August 1.35 

September 1 . 50 


Average  for  six  months $1 . 35 


October $1.70 

November 1 . 90 

December 1 . 90 

1909. 

January 1 . 90 

February 1.90 

March .                                                   1 . 70 


Average  for  six  months $1 . 833 


No.  45.]  33 

per  cwt. 

April $1.50 

May 1.25 

June 1.05 

July 1.20 

August 1 . 35 

September 1 . 45 


Average  for  six  months $1 . 30 


October $1 . 90 

November 2.00 

December 2 . 05 

1910. 

January 2 . 05 

February 2 . 00 

March.  1.80 


Average  for  six  months.  .  $1.966 


PRICKS  PAID  TO  THE  PRODUCERS  FOR  MILK  AT  MONTGOMERY,  N.  Y. 

1907.  per  cwt. 

April $1.20 

May 1.00 

June .90 

July 1.00 

August 1 . 10 

September 1 . 20 


Average  for  six  months $1 . 0833 


October 1 . 40 

November 1 . 50 

December 1 . 65 

1908. 

January .*....  1 . 65 

February 1 . 45 

March  .  1 . 30 


Average  for  six  months $1 . 4916 

2 


34  [SENATE 

per  cwt. 

April $1.35 

May 1.10 

June 1.00 

July 1.10 

August 1.30 

September 1 . 35 


Average  for  six  months $1 . 20 


October..  $1.50 


November. . 
December.  . 


1909. 

January. . 
February 
March . 


.75 

.70 


.70 
.70 
.50 


Average  for  six  months $1 . 6333 

April $1.25 

May 1.05 

June .95 

July 1.05 

August 1 . 30 

September 1 . 35 


Average  for  six  months $1 . 1586 


October $1 . 75 

November 1 . 85 

December .  .  1 . 90 


Average  for  three  months $1 . 8333 


PRICES  PAID  TO  THE  PRODUCERS  FOR  MILK  AT  ORANGE 
COUNTY,  N.  Y. 

Cent  Cent 

1907.  per  quart.  per  cwt. 

April 3J  $1.50 

May 3-2}  1.35 

June..  21  1.10 


'No.  45.]  35 

Cent        Cent 

per  quart.  per  cwt. 

July 2£-2J  $1.25 

August 3-3^  1 .35 

September 3^-3  J         1 . 50 


Average  for  six  months 3  $1 . 343 


October 4  $1 .80 

November. . .  . 4  2 . 00 

December 4  2 . 00 

1908. 

January 4  2.00 

February 3J  2.00 

March 3£  1.00 


Average  for  six  months 3 . 875  $1 . 953 

April 3^-3  $1.60 

May.  2J-24  1.30 

June 2J  1.10 

July 2i  1.25 

August.  3  1.35 

September 3-31  i .  50 


Average  for  six  months 2 . 2771     $1 . 35 


October 3J  $1 . 70 

November . 3|  1 . 90 

December 4  1 . 90 

1903. 

January 3|_4  i .  QQ 

February 3|_4  i ;  90 

March 31  i .  70 


Average  for  six  months 3 . 812       $1 . 833 


April.                         31  $1.50 

May....                 2f  1.25 

June 2J  1.05 

July 2j  1.20 


3G  [SENATE 


Cent  Cent 

per  quart.  per  cwt. 


August 3i  $1.35 

September 3^  1  . 45 


Average  for  six  months 2 . 8958       $1 . 30 


October 3:,!  $1 .90 

November 4£  2 . 00 

December 4}  2 . 05 

January 2 . 05 

February 2.00 

March.  1  .  SO 


Average  for  six  months 4 . 041       $1 . 966 


JOHN  P.  WIEKK. 

175  bottles,  daily  average  delivery,  per  wagon. 

Cost  of  milk  (per  quart) $0.0424 

Cry.  expense .  0050 

Cartage  from  Jersey  City 0025 

Freight ..-.:: ooso 

City  delivery 0162 

Pasteurizing  and  rapping .0045 


.0786 

.0040 

.  0826 


Wear  and  tear  on  horses,  harness,  wagons,  insurance,  rental, 
depreciation  on  machinery,  clerical  help,  not  included  in  the  above 
figures,  or  interest  on  investment. 

CHARLES  H.  C.  BEAKKS. 

Prices  Paid  to  Farmer*. 

1907.  1908.  1909. 

100  Ibs.     Qt.     100  Ibs.      Qt.   100  Ibs.    Qt. 

January 1.67  .0367  1.82  .03931  1.76  .041 

February 1 . 53  . 03277  1 . 74  . 03647  1 . 73  . 03748 

March.. 1.41  .03035  1.60  .03426  1.54  .03652 

April 1.39  .03033  1.37  .02871  1.33  .03095 


Xo.   45.] 


37 


May 

June 

July 

August .  .  . 
September 
October.  .  . 
November. 
December . 


1907 
100  Ibs. 

1.17 

.99 
1.10 
1.28 
1.42 
1.72 
1.82 
1.82 


Qt, 

1908. 
100  Ibs.      Qt, 

m 

100  Ibs. 

.  02645 

1.09 

.02366 

1.08 

.  02248 

.92 

.01991 

.90 

.0242 

1.05 

.02241 

1.09 

.  02906 

1.22 

.02741 

1.25 

.0317 

1.34 

.  02900 

1.43 

.  03890 

1.60 

.03678 

1.70 

.03931 

1.72 

.03848 

1.84 

.03931 

1.77 

.  03970 

1.91 

Qt. 

. 02575 
.02144 
. 02697 
.03143 
.03557 
.04148 
. 04301 
. 04547 


The  foregoing  prices  are  the  absolute  net  money  paid  to  the 
farmer  and  do  not  include  any  other  expenses,  such  as  cans  fur- 
nished to  the  farmer,  can  washing  or  any  other  expense  whatsoever 
in  the  matter. 


ALEXANDER  CAMPBELL: 

Including  everything,  and  its  distribution.  In  that  case  I  say 
the  cost  is  not  less  than  four  and  three-eighths  cents.  And  during 
the  warm  weather  when  much  ice  is  required  for  the  preservation 
of  the  milk,  and  to  meet  the  requirements  of  the  board  of  health, 
in  regard  to  its  temperature,  the  cost  is  fully  five  cents  per  quart: 
that  was  our  experience. 

Here  is  the  expense  of  the  several  stages  in  dealing  with  a  quart 
of  milk  under  favorable  circumstances  from  its  first  receipt  to  its 
final  delivery: 

Cents. 

375 

75 

.  375 

.25 


Handling  at  the  country  creamery 

Freight  to  Jersey  City 

Truckage  to  city  creamery 

Bottling  and  pasteurization 

I  don't  think  that  quite  enough  for  that  item, 
little  too  much  on  the  others. 

Bottles  and  caps 

Ice  during  entire  handling 

Delivery  to  trade.  . 


Mavbe  a 


.25 
.375 
2.00 


4.375 


38  [SENATE 

DEALERS'  HANDLING  EXPENSES. 
Compiled  by  C.  H.  C.  Beakes. 

Wholesale. 

Creamery 12/40  . 0030  per  qt. 

Freight 32/40  . 0080  per  qt. 

Carting,  railroad  to  office 10/40  .0025  per  qt. 

Delivery 20/40  . 0050  per  qt. 


Total  (exclusive  office  expenses) 0185  per  qt. 


Retail. 

Bottling  and  handling  at  creamery 30/40  .0075  per  qt. 

Freight 40/40  . 0100  per  qt. 

Cartage 20/40  . 0050  per  qt. 

Route  delivery 2. 10/40  .0225  per  qt. 


Total  (exclusive  office  expense) 0450  per  qt. 


PRICES  PAID  BY  BORDEN'S  CONDENSED  MILK  Co.  TO  FARMERS, 
1908  AND  1909,  AS  COMPARED  WITH  EXCHANGE  PRICES. 
(PRICES  PAID  BY  EXCHANGE  OBTAINED  FROM  "  MILK  RE- 
PORTER*") 

BORDEN'S  BORDEX'S 

•  ExcHAXGE.  price        plus  or  minus  Exchange. 

1908.  Per  qt.         Per  cwt.         per  cwt.        Plus  Minus. 

January 04000       1.860         2.00     +.140     

February 03750       1.744         2.00     +.256      

March 03500       1.628         1.80     +.172     

July 02500  1.163  1.25  +.087  

August 03000  1.395  1.35  -.045 

September 03125  1 . 453  1 . 50  +  .  047  

October 03750  1.744  1.70  -.044 

November 03833       1.783         1.90     +.117      

December 04000       1 . 860         1 . 90     +  .  040     

1909. 

January 03910       1.819         1.90      +.081      

February 03634       1.690         1.90     +.210      

March.  .03500       1.628         1.70     +.072 


No.  45.]  39 

BORDEN'S  BOEDER'S 

EXCHANGE.  price       plus  or  minus  Exchange. 

1909.                                           per  qt.         per  cwt.  per  cwt.  Plus.                 Minus. 

July 02750       1.279  1.20     -.079 

August 03129       1.455  1.35     -.105 

September 03500^     1.628  1.45      -.178 

October 03750*     1.744  1.90     +.156     

November.... 04050       1.884  2.00     +.116     

December .  .                      .  04250       1 . 997  2 . 05     +  .  073 


PRICE  OF  FLUID  MILK  IN  BOTTLES  REPORTED  TO  PRE- 
VAIL IN  OTHER  CITIES. 

EXHIBIT  V-E. 

Per  quart. 

MONTREAL,  CANADA.     Half  bottled  in  city;  balance 

at  dairies,  three  miles  outside  of  the  city;    sold  for.     9  cents. 
SCRANTON,  PA.     Two  dealers  bottle  in  the  country; 

one  sells  at 9  cents. 

the  other  at 10  cents. 

PHILADELPHIA,  PA.     About  10  per  cent,  of  supply 

bottles  at  the  farm,  sells  for 10  cents. 

One  dealer  supplying  West  Philadelphia,  bottling 

at  Kennett  (just  outside  of  city  limits)  sells  for.  .  .     8  cents. 
BALTIMORE,  MD.     All  milk  bottled  in  the  city;  sold  at     9  and  10  cts . 
BUFFALO,  N.  Y.     Only  one  dealer  bottles  at  dairy; 

sells  for 12  cents. 

ALBANY,  N.  Y.     One  dealer  bottles  at  dairy  (claims 

•milk  is  certified)  and  sells  at 14  cents. 

BOSTON,  MASS.     Milk  bottled  at  farm  sold  by  four 

dealers,  at 11  to  20  cts. 

Milk  bottled  at  Agricultural  State  Farm  sold  at .  .    16  cents. 

Three  of  the  largest  dealers,  bottling  in  Boston, 

sell  at 9  cents. 

PROVIDENCE,  R.  I.     Thirty-six  bottle  at  the  farm 

and  sell  at 7  and    8  cts. 

Majority  sell  at 8  cents. 

LOWELL,  MASS.     Two  dealers  bottle  at  the  farm; 

sell  for 7  and    8  cts. 

MANCHESTER,    N.    H.     Two   dealers   bottle   at   the 

farm;  sell  some  for 8  cents. 

But  most  is  sold  at 10  cents. 


40  | SKXATK 

Per  quart. 

LAWRENCE.  MASS.     Milk  bottled  at  the  farm;  sells 

for 7  and    8  cts. 

MEDFORD,  MASS.     Sixty-two  milkmen  in  this  town; 

sell  for 8  and    9  cts. 

PORTLAND,  ME.     Bottled  in  the  citf ;   sells  for 8  cents. 

HARTFORD,  CT.     Farmers  bottle  at  farms  near  town; 

sell  for 8  cents. 

SPRINGFIELD,  MASS.     Bottled  in  the  cjty;  sells  for.  .     9  cents. 

PORTLAND,  ME.     Bottled  in  the  city;   sells  for 8  cents. 

NORFOLK,   VA.     Milk  bottled  at  dairies  near  city; 

not  sold  for  less  than 10  cents. 

WASHINGTON,  D.  C.     All  milk  bottled  in  the  city; 

sells  for 9  cents. 

CHARLESTON,    S.    C.     Uniform   price,    milk    bottled 

in  the  city 10  cents. 

WILKES-BARRE,     PA.      Milk    bottled    at    the    farm; 

sells  for 10  cent  s. 

ST.  PAUL,  MINN.     Milk  bottled  in  the  city;   sells  for     7  cents. 
MINNEAPOLIS.     MINX.      Milk    bottled    in    the    city; 

sold  for 7  cents. 

XK\Y  OHLKANS,   LA.     All  milk  bottled  in  the  city; 

sells  for 10  and  12  cts. 

PITTSBURG,  PA.     Some  bottled  in  the  country,  most 

in  the  city;   sells  for 9  and  10  cts. 

JACKSONVILLE,    FLA.     Bottled   at   dairies   "  in   im- 
mediate neighborhood  " 12  and  13  cts. 

SYRACUSE,  N.  Y.     All  bottled  in  the  city;  sold  for.  .      7  cents. 
SALT  LAKE  CITY,  UTAH.     "  So-called  sanitary  prod- 
uct, in  bottles  "  sells  for 10  cents. 

ATLANTA,  GA.      Practically  all  milk  bottled    in  the 

city;  sells  for 10  cents. 

OMAHA,  NEB.     All  milk  bottled  at  the  farm;   sells  for  lOand  121  cts. 
QUEBEC  CITY,  CAN.     Milk  bottled  in  the  city;    sells 

for 10  cents. 

TORONTO,  CAN.  •  Milk  bottled  in  the  city;  sells  for.  .    10  cents. 
SAN  FRANCISCO,   CAL.     Milk   bottled   at   the   dairy 

under  sanitary  conditions 15  cents. 

Milk  bottled  in  the  city  sells  for 10  cents. 

.SAN    FRANCISCO    SUBURBS.      OAKLAND,    ALAMEDA, 

BERKLEY.     Milk  bottled  in  the  city;  sells  for.  ...    11  cents. 
CLEVELAND,   OHIO.     All   milk   bottled  in  the   city; 

sells  for.  .  8  cents. 


Xo.   45.]  41 

Per  quart. 

BIRMINGHAM,  ALA.  Milk  is  bottled  at  dairies  just 
outside  of  the  city  limits,  and  brought  in  on 
wagons;  sells  for 10  cents. 

MEMPHIS,  TENN.     Bottled  at  dairies  adjacent  to  the 

city  and  brought  in  on  wagons  and  delivered  ....    10  cents. 

ROCHESTER,  N.  Y.     Put  up  at  the  dairy,  claimed 

certified 10  cents. 

Los  ANGELES,  CAL.     Bottled  at  the  dairy;  sells  for..    10  cents. 

ST.  Louis,  Mo.     Bottled  in  the  city;   sells  for 7  and  8  cts. 

KANSAS  CITY,  Mo.     Bottled  in  the  city;   sells  for.  .  .    10  cents. 

BUTTK,  MONT.     Little  sold  in  bottles;  that  which  is 

is  bottled  near  Butte  and  brought  in;  sells  for.  .  .    10  cents. 

MISSOULA,  MONT.  Milk  collected  by  wagons;  some 
bottled  in  city;  sold  12  quarts  for  $1.00,  or,  per 
quart 8 J  cents. 

GREAT    FALLS,    MONT.     Milk    brought    to    city    on 
wagons    and    usually    delivered    in    bulk;  bottles   . 
carried  for  special  customers 8|  cents. 


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"No.  45.]  43 

NORTH  ATLANTIC  DIVISION. 

Maine.  Massachusetts.  New  York. 

New  Hampshire.  Rhode  Island.  New  Jersey. 

Vermont.  Connecticut.  Pennsylvania. 

FROM  TWELFTH  CENSUS  OF  THE  UNITED  STATES  —  PART  I. 

STATE  OF  NEW  YORK.  1880.  1890.  1900. 

Total  population 5,082,871  6,003,174  7,268,894 

Urban  population.  Living  in 

places  of  4,000  or  over ....  2 , 726 , 367  3 , 805 , 477  5 , 176 , 414 

Rural  population 2 , 356 , 504  2 , 197 , 697  2 , 092 , 480 

Number  of  urban  places 58  84  83 

Per  cent,  of  urban  of  total 

population 53.6               63.4  71.2 


UNITED  STATES  CENSUS  BULLETIN  ON  POPULATION  —  No.  4. 

In  1880  43.6  per  cent,  of  population  in  New  York  lived  in  country 
districts. 

In  1890  34.8  per  cent,  of  population  in  New  York  lived  in  country 
districts. 

In  1900  21.7  per  cent,  of  population  in  New  York  lived  in  country 
districts. 


EXHIBIT  5-D. 
TYPICAL  CONTRACT  BY  BORDEN'S  CONDENSED  MILK  COMPANY, 


This  agreement,  made  this day  of  September  15,  1909r 

between  BORDEN'S  CONDENSED  MILK  COMPANY,  party 
of  the  first  part,  hereinafter  known  as  the  company,  and  each  of 
the  undersigned,  parties  of  the  second  part,  hereinafter  known  as 
the  dairyman, 

Witnesseth,  That  the  parties  hereto,  for  and  in  consideration  of 
the  sum  of  one  dollar,  each  to  the  other  in  hand  paid,  receipt  of 
which  is  hereby  acknowledged,  each  agree  individually,  and  not 
for  others,  to  perform  the  agreements  herein  set  forth,  and  specified. 

The  dairyman  agrees  to  sell  and  deliver  daily  to  the  company, 
at  its  plant  at  Whitneys  Point,  at  the  hour  it  names,  the  amount 


44:  |  SEN ATJS 

of  milk  produced  by  his  or  her  dairy,  as  specified  below,  the  milking 
of  the  morning  of  delivery  and  evening  preceding,  such  milk  to  be 
whole,  sweet  and  unadulterated  and  uncontaminated; 

That  the  cow  stables  will  be  amply  lighted  with  windows  and 
well  ventilated;  to  keep  them  clean,  removing  daily  therefrom  all 
manure  or  foul  material;  to  use  no  lior.se  manure  or  foul  material 
for  bedding;  to  keep  no  hogs,  sheep  or  fowls  housed  in  said  stables; 
to  keep  the  cows  clean; 

To  thoroughly  wash  and  rinse  all  milk  utensils  used  in  the  dairy 
immediately  after  use  morning  and  evenings;  to  rinse  the  milk 
cans  and  covers  with  clean  water  before  putting  milk  therein; 
to  put  no  milk  in  unclean  cans;  to  keep  the  outside  of  cans  and 
covers  clean  and  bright,  and  when  not  in  use  to  keep  the  cans  up- 
side down,  with  covers  off,  on  a  rack  elevated  at  least  three  feet: 

To  provide  a  milk  house  within  clean  surroundings,  lighted  and 
ventilated,  of  suitable  capacity  and  not  connected  with  any  stable 
or  kitchen;  to  be  painted  or  whitewashed  inside,  to  be  used  for 
the  safe  keeping  of  milk  and  for  no  other  purpose,  unless  for  storing 
milk  utensils: 

To  have  the  milking  done  with  dry  hands,  in  the  most  cleanly 
manner;  immediately  after  milking  to  remove  the  milk,  including 
strippings,  to  the  milkhouse.  strain  it  through  a  ]()()-niesh  wire 
cloth  strainer,  and  to  cool  the  milk  to  ")S  degrees  within  forty-five 
minutes  from  the  time  it  is  drawn  from  the  cow,  by  placing  the 
cars  of  milk  in  a  vat  of  water  and  frequently  stirring  the  milk,  or 
by  the  use  of  approved  aerators;  to  keep  the  cans  of  milk  in  the 
vat  of  water  until  the  time  for  delivery;  to  prevent  the  milk  from 
freezing  or  rising  in  temperature,  to  exceed  5N  degrees  between 
forty-five  minutes  after  drawn  from  the  cows  and  when  delivered 
at  the  company's  plant,  to  which  place  it  shall  be  transported  on 
a  spring  wagon,  covered  with  a  clean  canvas;  to  not  mix  evening's 
and  morning's  milk,  except  the  remnants  of  each  milking;  to  not 
deliver  the  milk  from  a  cow  that  has  calved  within  ten  days  or 
from  a  cow  which  will  calve  within  sixty  days,  or  from  any  cow  in 
an  unhealthy  condition; 

To  whitewash  the  cow  stables,  sides,  ceilings  and  stalls,  thoroughly 
throughout)  within  thirty  days  after  signing  this  contract; 

To  not  feed  the  cows,  ensilage,  wet  brewery  or  distillery  grains 
or  any  feed  which  will  impart  a  disagreeable  flavor  or  odor  to  the 
milk; 

To  immediately  notify  the  company  in  case1  of  any  sickness 
or  disease  among  the  cows  of  the  herd; 


Xo.  45.]  45 

To  immediately  notify  the  company  if  any  member  of  his  or  her 
household,  or  any  member  of  any  family  occupying  the  premises 
on  which  the  milk  is  produced,  has  any  infectious  or  contagious 
disease,  or  any  person  who  may  be  assisting  in  the  work  of  the 
dairy  who  comes  in  contact  with  any  infectious  or  contagious 
disease. 

When  such  notification  is  given  and  the  company  shall  deem  it 
necessary  to  discontinue  to  receive  the  milk  of  said  dairy,  the 
company  will  remunerate  the  dairyman  for  such  loss  incurred  on 
the  milk  during  the  period  of  sickness,  or  until  the  danger  of  con- 
tagion has  been  removed. 

It  is  mutually  agreed  that  the  representatives  of  the  company 
shall  at  reasonable  hours  have  access  to  and  the  right  to  examine 
the  cows,  cow  stables,  milkhouse  feed,  dairy  utensils  and  place  for 
keeping  same;  and  that  if  any  cow  is  found  to  be  suffering  with 
any  disease  which,  in  the  judgment  of  the  company's  representa- 
tive, would  tend  to  produce  unwholesome  milk,  such  cow  shall 
be  removed  from  the  herd,  either  temporarily  or  permanently,  as 
may  be  necessary  to  insure  wholesome  milk;  but  there  shall  be  no 
needless  sacrifice  in  any  herd,  and  sufficient  evidence  of  the  existence 
of  disease  shall  be  produced  to  warrant  the  removal  of  any  cow; 

That  should  the  dairyman  be  unable  to  make  deliveries  of  milk 
to  the  company,  because  of  the  action  of  legal  authorities,  he  or 
she  will  give  notice  to  the  company  and  shall  be  under  no  obliga- 
tion to  deliver  milk  to  the  company;  if,  because  of  conditions 
caused  by  the  elements,  floods,  or  fire,  accident,  action  of  legal 
authorities,  interruption  of  railroad  transportation  facilities, 
strikes,  or  inability  to  secure  necessary  supplies,  the  company  "be 
prevented  or  hindered  from  operating  its  plant,  manufacturing 
or  preparing  the  milk  for  shipment,  or  shipping  or  marketing  its 
products,,  the  company  shall  give  notice  of  the  fact  and  shall 
thereafter  be  under  no  obligation  to  receive  milk  from  the  dairyman 
but  at  the  end  of  such  period  or  periods  and  when  normal  con- 
ditions are  restored,  the  parties  to  this  agreement  shall,  and  are 
hereby  bound  to,  continue  the  performance  of  this  agreement; 

That  failure  to  comply  with  the  requirements  of  this  agreement 
by  the  dairyman  shall  be  sufficient  warrant  for  the  company  to 
refuse  to  receive  milk  from  the  dairyman  until  such  time  as  the 
conditions  of  this  agreement  are  complied  with,  and  in  such  event 
the  company  shall  in  no  way  be  held  liable  for  any  losses  sustained; 
that  the  company  has  the  right  to  cancel  this  contract  in  case  it 
has  satisfactory  evidence  that  adulterated,  skimmed  or  con- 


46  [SENATE 

laminated  milk  is  being  delivered  or  offered  for  delivery  by  the 
dairyman. 

The  company  agrees  to  buy  from  the  dairyman  the  number  of 
pounds  of  milk  assigned  individually,  if  produced  and  handled  as 
specified  herein;  to  wash  and  clean  at  its  plant  the  inside  of  all 
cans  in  which  milk  is  delivered;  to  pay  on  the  fifteenth  day  of  the 
month  following  month  of  delivery  the  following  price  for  milk 
accepted: 

Daily  average  to  be  delivered,  250  pounds  at  $1.80  per  100 
pounds  for  the  month  of  October,  1909. 

Daily  average  to  be  delivered,  200  pounds  at  $1.95  per  100  pounds 
for  the  month  of  December,  1909. 

Daily  average  to  be  delivered  250  pounds  at  $1.90  per  100  pounds 
for  the  month  of  November,  1909. 

Daily  average  to  be  delivered,  200  pounds  at  $1.95  per  100  pounds 
for  the  month  of  January,  1910. 

Daily  average  to  be  delivered,  200  pounds  at  $1.90  per  100  pounds 
for  the  month  of  February,  1910. 

Daily  average  to  be  delivered,  250  pounds  at  $1.70  per  100  pounds 
for  the  month  of  March,  1910. 

In  witness  whereof,  the  parties  have  hereunto  interchangeably 
set  their  hands  the  day  and  year  first  above  written. 

BORDEN'S  CONDENSED  MILK  CO. 


TESTIMONY  OF  MARVYN  SCUDDER,  ACCOUNTANT     ^ 
FOR  STATE. 

SUMMARY. 
BORDEN'S  CONDENSED  MILK  COMPANY: 

Net  profits  on  fluid  milk  and  cream,  after  all  deductions,  New 
York  and  Chicago,  year  ending  June  30,  1909,  $793,622.05 
(p.  1140);  year  ending  June  30,  1908,  $514,783.35  (p.  1140). 

Total  net  profits  year  ending  September  30,  1909,  $2,617,029.40 
(p.  1141). 

Capital  stock,  $25,000,000.  (Of  this  amount,  $15,428,408.46 
trade-mark,  patents  and  good  will)  (p.  1142). 

Net  profits,  after  all  deductions,  on  fluid  milk  and  cream  (New 
York  alone)  year  ending  June  30,  1909,  $682,367.16;  year 
ending  June  30,  1908,  $512,243.89  (pp.  1142  and  1143). 


No.  45.]  47 

Net  profits,  after  all  deductions,  on  fluid  milk,  New  York  aloner 
year  ending  June  30,  1909,  $496,976.36;  year  ending  June 

30,  1908,  $326,579.99  (pp.  1143  and  1144). 

Net  profits,  after  all  deductions,  on  fluid-milk  and  cream,  New 
York  and  Chicago,  nine  months  ending  September  30,  1909, 
$1,076,772.15  (p.  1144);  nine  months  ending  September  30, 
1908,  $753,824.50. 

Net  profits,  after  all  deductions,  on  fluid  milk  alone,  Xew 
York  and  Chicago,  nine  months  ending  September  30,  1909, 
$779,407.92  (p.  1145);  nine  months  ending  September  30, 
1908,  $439,054.80. 

SHEFFIELD  FARMS,  SLAWSON  &  DECKER  COMPANY: 

Capital  stock  (June  30,   1909),  $500,000  (p.   1147);    (Subse- 
quently issued)  $91,400   (p.  1147);    total  $591,400  (of  this 
amount,  $302,436.51  issued  for  good  will). 
Net  earnings,  after  all  deductions,  fiscal  year  ending  February 

28,  1909,  $221,694.63  (p.  1149). 
Net  earnings,  after  all  deductions,  nine  months  ending  October 

31,  1909,  $257,923.42  (p.  1149). 

Dividends  (1909)  (p.  1150): 

February,  $5,000  (1%);  March,  $5,000  (1%);  April,  May 
June  and  July,  $10,000  each  (2%);  August,  $54,650  (11%); 
September,  $11,859.93  (approximately  2%  on  additional 
stock). 

Dividends  (1908)  (p.  1151): 

March,  $5,000  (1%);    April,  May  and  June,  $10,000  each 

(2%);     July,     August,    September,     October,     November, 

December,  January  and  February,  $5,000  each  (2%). 
Dividends  (Borden's  Condensed  Milk  Co.)  (p.  1155);   1909  and 

1908,  $1,400,000  (8%)  common;    $450,000  (6%)  preferred; 

1907  and  1906,  10%  common;  6%  preferred. 
Mortgage    debt  —  (October    31,    1909)    of    Sheffield    Farms, 

Slawson  &  Decker  Co.,  $352,400  (real  estate  mortgages,  p. 

1158). 
Surplus— (October    31,    1909)    Sheffield    Farms,    Slawson    & 

Decker  Co.,  $962,672.02  (p.  1159). 
Surplus  —  (June    30,    1909)    Borden's    Condensed    Milk    Co., 

$8,824,230.58   (p.   1159). 


48  [SK.XATK 

ALEXANDKK  CAMPBELL  MILK  COMPANY: 

Net  profits,  six  months  ending  June  30,  1909,  $49,880.04 
(p.  1160);  year  ending  December  31,  1908,  $44,006.56 
(p.  1160). 

Dividends,  June  30,  1908,  $11,315;  December  31,  1<)<)X, 
$11,352.50;  June  30,  1909,  $11,434.50  (p.  1160). 

Capital  stock,  $387,000,  or  thereabouts  (p.  1161). 

Amount  added  to  surplus  of  Campbell  Co.,  during  year  ending 
December  31,  1908,  $21,339.06  (p.  1163);  for  six  months 
ending  June  30,  1909,  $38,445.54  (p.  1163). 

Amount  charged  off  for  depreciation  (Sheffield  Farms,  Slawson 
&  Decker  Co.)  year  ending  February  28,  1909,  $26,990.82 
(p.  1165);  for  eight  months  ending  October  31,  1909,  nothing 
charged  off  on  books  of  company  for  depreciation;  $48,000 
allowed  for  depreciation  before  arriving  at  net  profit  of 
$257,923.42  (p.  1164). 

1  )KI.OS  AXTKI.I.  : 

I  reside  at  Depnsii.  Delaware  enmity,  about  I7l>  miles  from 
Xe\v  York.  1  have  bien  a  farmer  all  my  life  and  I  have  heen 
supervisor  of  a  farm  -ince  J!)0<).  It  cost  me  a  little  over  oc.  a 
<piart  to  produce  milk  during  the  years  11)05— (5—7— 8.  I  think 
the  cost  of  production  was  a  trifle  more  in  1908  than  the  previous 
years.  I  think  the  <•<>-!  of  production  in  11)0!)  has  advanced  some- 
what over  that  of  ItMIS.  I  don't  helieve  that  a  man  could  produce 
milk  in  either  the  year-  11IOS  and  11)0!)  at  less  than  .'>.', e.  a  quart. 
I  should  say  that  a  fair  profit  might  he  obtained  from  milk,  say 
for  five  months  of  the  year  for  -'5c.  ami  ,"»c.  for  the  remaining  seven 
month.s,  and  I  am  basing  mv  opinion  on  the  conditions  that  exist 
in  my  locality.  If  I  was  unwilling  to  accept  the  price  which 
Hordei!  offered  for  my  milk,  I  could  send  it  to  the  butter  factory. 
I  could  take  my  milk  there  and  pay  oc.  a  pound  for  having  the 
butter  made  up  and  take  my  chances  on  the  market,  or  1  could 
sell  to  a  farm  there  that  buys  milk  at  Exchange  prices  as  a  rule, 
but  this  year  this  farm  is  giving  •)  choice  of  either  the  Borden 
prices  or  the  Exchange  prices.  There  has  not  been  much  differ- 
ence in  recent  years  between  the  IJnnleu  and  the  Exchange  price; 
that  is,  averaged  for  the  whole  year.  F  have  been  in  the  Borden 
creameries,  in  my  vicinity  and  have  seen  separators  in  operation 
therein.  I  have  seen  the  milk  running  in  from  the  vat  and  have 


ffi%   45.]  49 

seen  the  cream  after  it  is  separated  from  the  milk  go  into  the 
receptacle  that  it  would  naturally  spout  into.  I  have  never 
seen  them  reunite  it.  In  recent  years  Bordens  have  cleansed 
their  milk  by  putting  it  into  the  separator.  I  have  under- 
stood from  friends  of  mine  that  are  in  the  business  that  a 
separator  can  be  set  so  that  they  can  take  oft*  enough  cream 
to  leave  a  3  per  cent,  butter  fat  milk.  Bordens  manufacture 
different  grades  of  cream  ;  they  have  a  separator  adjusted  so  that 
it  will  separate  it  and  grade  it.  I  have  heard  that  there  is  in 
existence  a  Consolidated  Milk  Kxelumi>e  which  fixes  the  price  to 
consumers.  Bordeii's  factory  has  'been  in  my  vicinity  from  eigh- 
teen to  twenty  years.  Consequently  their  price  has  largely  con- 
trolled us.  Prior  to  1'JOS.  the  Borden  price  w;is  on  the  average 
better  than  the  Exchange  price.  They  have  been  pretty  nearly  to- 
gether for  the  last  two  years,  and  as  I  have  stated  before,  you  can 
take  yonr  pick.  The  Mutual  Cream  and  Milk  Company,  in.  my 
vicinity,  buy  milk  at  Exchange  prices.  I  do  not  know  of  anything 
thnt  would  lead  me  to  believe  that  there  exists  any  combination 
among  the  dealers  of  New  York  city  to  fix  or  control  the  price 
paid  by  them  to  the  producer.  I  don't  think  the  raise  in  price  in 
Xew  York  from  8c.  to  9c.  benefited  the  producers  in  our  section 
any,  because  I  think  the  price  had  been  established.  There  is 
not  a  flush  of  milk  in  my  section  at  the  present  time.  1  can  see 
how  a  fiush  of  milk  among  the  dealers  in  Xew  York  city  might 
be  brought  about,  that  is,  by  the  raise  in  price  of  Ic.  a  quart,  and 
the  26c.  freight  zone.  My  opinion  is,  in  my  section,  milk  can 
l:e  produced  cheaper  in  summer  than  in  winter.  If  the  Mutual 
Company  were  buying  milk  at  exactly  the  same  price  as  Borden 
or  giving  the  producer  his  choice  between  Borden  and  the  Ex- 
change price,  there  could  not  be  much  competition.  It  would 
sort  of  convince  a  man  that  the  Exchange  price  and  Borden's 
prices  weren't  liable  to  vary  much.  The  question  of  establishing 
co-operative  creameries  is  being  agitated  among  the  farmers  more 
than  it  ever  was  'before,  as  a  protection.  They  go  so  far  as  to 
advocate  the  building  of  these  creameries  if  they  are  never  used, 
and  have  them  in  readiness  in  case  that  the  Borden  prices  do  not 
suit  them,  that  they  can  manufacture  their  own  milk;  and  I  know 
of  some  instances  where  people  have  taken  stock  in  creameries 


50  [SENATE 

like  that  just  for  that  purpose  and  no  other.  They  are  sending 
their  milk  to  other  places ;  done  it  as  a  protection,  and  it  is  being 
advocated  to  quite  an  extent  in  our  section  of  the  country.  But 
I  think  the  fanners  ought  to  organize  just  the  same  as  other  fel- 
lows do;  that  is  my  opinion,  but  it  is  a  pretty  hard  proposition. 

OSMAN  L.  BARBER: 

I  reside  at  Canton,  St.  Lawrence  county,  New  York,  and  am  a 
dairyman  farmer,  and  have  been  the  same  practically  all  my 
life.  I  produced  76,931  pounds  of  milk  last  year,  that  is,  about 
38,000  quarts.  I  should  say  that  the  total  cost  of  producing  that 
milk  in  1909  was,  grain  $395,  and  silage,  hay  and  grain  fodders 
and  pasturage,  $390.  Labor  I  shouldn't  put  below  $500.  This 
is  not  counting  in  my  own  labor.  The  dairy  averaged  about  six 
and  a  fourth  cows  for  the  year,  that  is,  I  sold  a  few  cows  in  March 
and  estimated  by  the  month  it  gave  me  seventy-five  months  for 
one  cow  or  six  and  a  quarter  for  the  year.  I  sell  my  milk  to  the 
McDermott  Company  of  .Now  York  city.  I  think  it  has  cost  me 
.about  3^c.  to  'J:Jc.,  exclusive  of  the  use  of  the  farm. 

Q.  Interest  on  the  investment  ?  A.  Yes,  that  is  included  in  my 
labor  at  $500. 

Q.  Do  you  sell  to  McDermott  at  the  Exchange  price  or  at 
Borden's?  A.  Well,  neither.  They  put  out  a  price  for  six 
months  in  advance. 

I  haven't  compared  it  with  the  Exchange  price  but  I  think  it 
i>  -lightly  under  Bordcn's  as  a  rule.  I  signed  a  contract  in  which 
a  certain  amount  is  specified  for  each  month  during  the  >ix 
months.  I  am  not  acquainted  with  the  Exchange  price  of  milk, 
per  month,  but  I  sometimes  happen  to  read  them.  There  are 
other  stations  on  the  road,  the  R.,  W.  &  O.  division,  operated 
by  the  Mutual  Milk  and  Cream  Company  and  the  Phoenix  Cheese 
Company.  They  are  in  the  next  town  beyond  there,  Potsdam.  I 
have  no  personal  knowledge  that  there  is  a  combination  of  deal- 
ers and  it  exists  to  fix  a  price  that  they  will  pay  to  the  producer 
for  milk.  I  should  judge  from  reading  the  reports  that  a  combi- 
nation existed  in  New  York  city  to  raise  the  price  of  milk  from 
8c.  to  9c.  a  quart  on  November  1,  1909.  I  believe  that  the  co- 
operative creamery  and  cheese  factory  is  a  benefit  to  the  farmer. 
If  it  were  not  for  the  factory  we  would  be  dependent  upon  the 


No.  45.]  51 

New  York  market  entirely.  The  average  price  McDermott  paid 
to  me  during  the  year  1909  was  $1.51  per  hundred  pounds, 
that  is,.  a  little  bit  higher  than  the  price  paid  for  mine  because 
mine  was  mostly  winter  milk  ;  that  would  be  about  3c.  a  quart. 


W.  BAUDEE: 

I  reside  at  Fort  Plains,  Montgomery  county.  About  201 
miles  from  New  York.  I  own  and  operate  a  farm  about  three 
mi]es  south  of  Fort  Plain.  The  farm  is  operated  exclusively  as  a 
dairy  farm  and  I  keep  about  forty-five  cows,  about  thirty  to  thirty- 
five  milking  cows.  I  produced  about  8,500  pounds  per  cow.  Dur- 
ing the  year  1909  the  cost  entering  into  this  production  would  be 
the  feed,  plant  and  wear  and  tear  of  all  things  connected  with  it 
and  the  farm,  the  help,  etc.  I  do  not  know  what  it  cost  to  produce 
a  quart  of  milk.  I  think  a  farmer  should  have  10  per  cent. 
profit.  I  sold  my  milk  to  Fort  Plain  and  Otsequage  Valley 
Creamery  Company.  They  manufacture  milk  into  cream  and  sell 
it  in  New  York,  Albany  and  Schenectady.  Borden's  Condensed 
Milk  Company  also  own  Fort  Plain  Dairy  Kitchen.  I  obtain 
the  price  based  a  little  bit  upon  Borden's  price,  running  from 
five  to  ten  cents  per  month  per  hundred  under  Borden's,  because 
the  restrictions  were  not  at  the  creamery  what  they  were  at 
Borden's.  My  opinion  is  that  a  combination  does  exist  among 
the  dealers  in  New  York  city.  I  am  interested  in  the  milk  busi- 
ness so  it  might  make  a  difference  with  your  questions.  I  am 
one  of  the  principal  owners  of  this  Fort  Plain  and  Otsequage 
Valley  Creamery  Company,  and  I  know  lots  of  people  in  New 
York,  and  some  of  the  people  I  am  also  associated  with,  some 
of  them  perhaps  belong  to  this  Milk  Exchange,  but  I  am  not 
directly  or  indirectly  connected  with  the  Exchange  in  any  way, 
shape  or  manner,  have  nothing  to  do  with  it.  For  my  acquaint- 
anceship with  the  members  of  the  Eixchange,  it  is  my  opinion 
that  there  is  a  combination,  yes,  I  know  there  is.  My  opinion 
is  that  the  members  of  the  Exchange  are  bound  together,  that 
they  practically  fix  a  price  on  the  milk  shipped  to  New  York 
city  that  the  producer  must  accept  or  else  not  be  able  to  market 
his  milk.  I  do  not  know  of  any  combination  to  raise  the  price 
made  in  November,  1909,  to  nine  cents.  I  have  several  sepa- 


:>:>  I  SK. VATIC 

rators  but  we  never  separate  the  cream  and  then  add  it  to  the 
milk  to  bring  it  up  to  the  &  per  cent,  butter  fat.  We  can  set 
our  separator  so  MS  to  run  a  20  per  cent,  cream  or  a  40  per  cent. 
cream.  It  would  be  rather  difficult  to  set  a  separator  so  as  to  run 
a  oO  per  cent,  butter  fat  milk,  but  the  only  way  we  could  do  that 
is  to  run  it  and  add  the  cream  back  to  it  and  make  it  just  that. 
I  would  say  that  it  is  practically  impossible  to  set  the  separator 
to  do  it,  and  the  only  way  you  couhl  do  it  would  be  to  separate 
it  entirely  and  then  add  sufficient  cream  to  make  it  1}  per 
cent,  butter  fat  milk.  Bbrden's  factory  ship  both  milk  and  con- 
densed milk.  They  have  two  plants  here,  and  they  bought  one 
a  few  years  ago  of  the  Orange  County  .Milk  Association.  They 
had  separator-  same  style  as  mine. 

rOXDITIOXS  IX  THE  OOrXTRY.  COST  OF  PRODUC- 
ING MILK  AND  THE  FAIR  VALUE  OF  THE  SAMK. 
ETC. 

ISAAC  C.  BLAM>Y  : 

I  reside  in  ( in  enwich,  Washington  county,  Xew  York,  and 
have  been  running  a  farm  of  :>4<)  acres  for  four  years.  I  have 
thirty-six  milking  cows,  sixteen  or  seventeen  head  of  young  stock, 
and  six  or  seven  horses.  I  do  not  recall  the  number  of  quarts  of 
milk  !  produced  in  I'.KM),  but  I  keep  a  record  of  the  daily 
nun. unt  of  milk  produced.  I  cannot  say  how  much  it  costs 
per  quart  to  produce  milk  on  account  of  it  varying  so  much  from 
month  to  month,  but  I  should  think  that  it  costs  about  4Jc. 
per  quart  to  produce  milk  throughout  the  year.  T  run  my  farm 
entirely  as  a  dairy  and  make  money  only  from  dairy  products, 
such  as  milk,  butter  and  some  cattle.  I  run  the  farm  by  employed 
help  and  thus  it  cost  me  a  little  more  than  those  that  do  the 
work  themselves.  T  have  gotten  on  an  average  from  -my  milk 
during  the  year  (>c.  delivered.  T  deliver  milk  in.  the  village  and 
sell  it  retail  and  it  costs  me  about  2c.  and  2-]c.  a  quart  to  deliver 
it,  because  I  can  only  deliver  200  quarts  per  day,  and  on 
this  basis  T  am  selling  it  a  little  under  cost  to  produce.  I 
am  selling  butter  in  the  village  at  3Tc.  or  38 c.  a  pound.  There 
is  very  little  profit  on  it.  T  am  continuing  the  business  at  a 
loss  because  T  am  interested  in  the  community,  and  I  believe  that 


&o.  45.]  5:3 

•eventually  I  will  get  a  return  on  my  money.     The  uncertainties 
of  cost  of  production  of  milk  is  illustrated  by  the  difference  in 
value  of  heifer  and  bull  calves.     When  I  have  heifer  calves  I  get 
$Tv>    for    yearlings    and    the    bull    calves    I    sell    for    $2    apiece. 
Besides,  some  men  do  their  own  work  and  have  children  to  help 
them,  only  paying  the  hired  man.     In  the  East  a  bright  man  can 
make  more  money   at   other  business.      My  main  business  is  in 
the  paper  business;  farming  is  somewhat  of  a  side  issue  with  me. 
1    am   interested    in  the   railroad   in  my  community,    and   at  the 
suggestion  of  Mr.  Whiting,  who  was  trying  to  build  up  a  freight 
for  the  road  through  a  milk  route,  I  assisted.     Boston  furnishes 
a  market  for  milk  in  my  community  and  Messrs,  H.  I.  Hoyt  and 
Wlii ting  appear  to  control  the  Boston  trade.     If  the  middlemen 
and  the  cattlemen  could  agree  there*  might  be  some  economy,  as 
the    wag; ins    might    be    filled    and    thus    deliver    more    than    200 
bottles    per    wagon.       I    do    not    know    who    makes    the    price; 
Burden's    may    know   the   most    about    it    and   the  others    follow. 
Some   people    say   that   they   are   all    in    one   combination.      The 
separator  cannot  be  used  to  draw  off  the  excess  of  butter  fat. 
I  have  never  heard  of   it   being  done   in   our  community.      My 
suggestions  to  better  conditions  in   New  York  are,  that  the  city 
should  establish  places  or  receiving  stations  scattered  throughout 
the   city   and   the   farmers   ship   there  to  middlemen,   such  open 
markets  as  Denmark  has  where  butter  and  everything  is  displayed. 
This   leaves    the   business   open    and    subject    to    inspection   and 
furnishes  facilities  to  render  the  expenses  from  producer  to  the 
consumer.     There  should  be  some  kind  of  regulation  by  the  State. 
If  the  farmer  could  get  more  he  would  be  in  a  position  to  produce 
a   better   quality   of  milk   and   still   make   a  living.      It  may  be 
possible  that  the  trouble  is  that  the  middleman  controls  either 
the  railroads  or  the  receiving  stations   or  docks   in  New  York. 
Some  facilities  for  shipping  direct  to  New  York  should  be  pro- 
vided.    I  would  have  stations  at  both  ends  of  the  country  and  in 
the  city,  with  stations  in  the  country  controlled  by  the  farmers, 
The  farmers  should  have  a  station  in  the  country  so  that  they 
can  ship  their  milk  for  manufacturing  and  thus  be  independent 
and  there  should  be  free  competition  among  the  dealers  in  New 
York. 


54  [SENATE 

Q.  And  you  would  have  no  exchange  establishing  prices  \  A, 
Well,  you  can't  do  that,  I  don't  believe. 

The  middlemen  have  facilities  for  manufacturing  and  they 
also  have  facilities  for  doing  the  same  in  the  country.  When 
there  is  a  big  flow  of  milk  the  situation  has  to  be  controlled  in 
some  way. 

Q.  Then  you  think  an  exchange  properly  organized  down  there 
would  be  a  good  thing?  A.  I  don't  doubt  but  what  it  would. 

It  is  very  expensive  to  handle  articles  in  New  York  and  it 
might  be  a  detriment  to  the  farmer  to  trade  and  handle  them 
himself.  I  am  somewhat  acquainted  with  the  middlemen  and 
they  have  many  things  to  contend  with.  Same  conditions  exist 
in  every  line  of  business  in  New  York.  It  is  a  "  tally  that  you 
have  to  pay."  It  is  so  on  entering  any  country  or  place.  I  think 
there  is  something  to  be  said  for  the  other  side.  There  is  an 
expense  of  handling  milk  when  you  have  a  surplus.  In  the  es* 
tablishment  of  an  open  market,  I  have  considered  the  fact  that 
milk  is  a  very  perishable  article  and  not  so  advantageously  sold  in 
the  open  market  as  most  other  commodities.  Now,  when  the 
milk  is  in  the  open  market  and  you  have  a  surplus,  you  could  put 
it  in  butter  in  New  York  as  well  as  in  any  other  place,  or  put  it 
into  cream  or  hold  it  back.  That  is  the  reason  I  say  the  New 
York  end  and  the  farm  end  has  got  to  be  in  close  touch  so  they 
need  not  ship  too  much  milk  into  New  York  and  put  it  into 
butter  at  the  other  end  and  put  it  into  the  cream,  and  they  can 
hold  cream,  and  they  can  hold  milk  for  a  long  time.  The  dealers 
should  receive  the  milk  just  as  they  would  their  own  to-day,  but 
the  cleanliness  should  be  looked  to  by  the  city  government.  The 
situation  would  be  helped  in  that  it  would  give  small  buyers 
an  opportunity  to  receive  milk  there.  It  would  not  be  handled 
to  such  a  large  extent  by  these  other  large  dealers.  Now,  if 
you  wanted  to  ship  a  hotel  in  New  York  city,  it  is  very  expensive 
to  do  it.  When  shipping  in  little  bottles  like  that  (indicating) 
like  the  Waldorf,  they  were  paying  as  high  as  5c.  per  quart  for 
cream,  but  if  you  have  a  market  by  the  city  like  the  city  market 
for  other  things  —  the  details  I  haven't  worked  out  in  my  head 
—  but  that  idea  is  that  you  could  sell  somebody  there  at  a  price,, 
and  the  man  controlling  it  at  the  other  end,  which  I  believe  enters 


No.  45.]  55 

into  the  control  of  the  price  of  milk,  shut  it  off  at  the  other  end 
so  you  wouldn't  have  nearly  the  surplus  in  New  York  to  take  care 
of.  If  the  farmer  had  some  share  in  the  making  of  the  price 
in  the  Consolidated  Milk  Exchange,  that  is,  if  the  milk  was- 
offered  to  people  that  wanted  it,  they  would  buy  up  so  that  they 
would  have  a  price  established,  I  think  that  would  be  a  case 
where  the  farmers  in  flush  season  would  ship  a  whole  lot  more 
than  is  necessary,  which  should  be  kept  back  and  put  in  the 
form  of  butter  or  some  other  product.  I  do  not  think  the 
farmer  could  practically  have  a  say  in  the  making  of  the  price  by 
Exchange,  because  there  would  be  people  in  the  city  who  could 
save  this  milk  and  keep  it  for  days  there  properly,  and  if  the 
price  went  up  they  would  serve  it,  and  if  it  went  down  they 
would  buy.  I  believe  it  is  absolutely  necessary  to  control  the 
amount  of  milk  going  into  New  York  city,  and  to  have  the  price 
fair  to  the  farmer.  The  farmers  are  getting  more  conversant 
with  conditions  and  they  will  get  their  rights.  The  middleman 
is  being  crowded.  He  has  his  use,  but  it  will  be  harder  for 
him  to  do  business  in  the  future  than  it  has  been  in  the  past. 
As  soon  as  the  farmer  increases  his  knowledge  of  conditions,, 
then  he  will  be  able  to  control  his  milk  supply  to  better  ad- 
vantage. It  lies  with  the  farmer  and  it  lies  with  the  State  to- 
make  transactions  as  open  as  possible  and  that  there  is  no  trickery 
about  it.  Look  at  the  schemes  that  you  hear  of  that  the  board 
of  health  have  in  New  York  city  for  the  purpose  of  cleanliness. 
If  those  schemes  were  lived  up  to,  New  York  would  not  get  any 
milk  at  all.  There  is  plenty  of  cattle  that  are  killed  that  have 
no  tuberculosis.  In  the  testing  of  a  cow  —  I  am  only  taking 
this  from  people  that  I  know  who  know  something  about  it  — 
they  can  start  the  herd  of  cattle  and  get  them  excited,  they  will 
show  these  tests.  If  the  cattle  are  quiet,  they  show  no  tubercu- 
losis. Those  are  the  things  and  many  more  that  make  it  so 
expensive  to-day  for  the  farmer  to  produce  milk,  and  they  should 
have  a  great  deal  more  under  these  conditions.  New  York  city 
will  have  to  pay  for  milk  if  she  wants  it.  It  is  putting  people 
out  of  business.  I  know  of  nothing  that  has  developed  in  the  year 
1909  that  was  not  present  in  the  year  1908  or  1907  that  would 
cause  the  large  milk  companies  to  raise  the  price  of  milk.  Our 


."HI  I  SKXATI-: 

milk  goes  to  Boston  and  J  am  more  interested  in  the  price  paid 
at  (Greenwich  than  in  Xew  York.  I  know  it  is  costing  a  farmer  a 
great  deal  more  in  the  last  two  years. 


KOIKJK  M.  Bi?e>wx  : 
I  reside  at  Ilinsdale,  Cattarangus  county,  about  400  mihs  from 
Xew  York  city  and  have,  what  might  he  termed,  a  dairy  farm.  I 
have  h;n  a  farmer  [ill  my  life.  I  have  no  figures  as  to  exact 
cosl  of  production  of  a  quart  of  milk  during  the  year  I!)!)!),  hut  it 
is  my  opinion  that  it  would  cost  from  )>|c.  to  ,'>;\c.  to  produce  a 
(jiiai't  of  milk  during  1  !>(!!>.  I  consider  the  following  items  enter- 
ing into  the  cost  to  produce:  Kecd.  labor  and  plant,  the  farm, 
interest  on  the  money,  etc.,  invested.  I  think  the  producer  ought 
to  have-  i-c.  per  quart  in  orde  r  to  realize  a  fair  profit.  I  s-:  11  my 
milk  to  the  Mowell  Jersey  City  Milk  and  ('ream  Company,  and 
the  balance  of  it  goes  lo  the  e'hees,*  factory  in  the  height  of  the 
season.  I  suppose  I  sell  my  milk  at  Exchange  prices,  that  is 
what  I  nud(  r-t;!iid.  but  don't  have  a  contract  with  the  Ilowell 
Company.  Tliey  usually  po>t  th:  ir  price  in  a  conspicuous  place 
on  llu  ir  building.  I  think  it  is  th<>  ge  IK  ral  understand  ing  that 
the  farmers  in  my  vicinity  get  Exchange  price.  I  take  the 
"American  Agriculturist"  and  this  paper  has  a  column  headed 
"  Kxchangc  Pi  ice  for  Milk."  There  are  no  creameries  in  my 
immediate  vicinity.  I  think  the  I!o\vell  Comnany  ship  from  the1 
station  from  twenty-five  to  thirty  cans  per  day.  There  is  practi- 
cally a  uniform  price  and  this  uniform  price  paid  by  the  dealers 
to  the  farmers  makes  me  think  that  a  combination  exists  among 
the  dealers  in  Xew  York  city  to  fix  or  control  the  price  paid  by 
them  for  milk  to  tin-  producer.  I  have  talked  with  Hord-en's 
patrons  about  the-  prices  and  they  are  very  nearly  the  same.  I  do 
not  know  of  any  agreement  to  raise  the  price1  from  Se-.  to  !>c.  on 
or  about  Xovemher  1,  11MH),  to  the  consumers.  I  do  not  know 
whether  a  comhination  would  be  de-trimental  or  heneficial  to  the 
prodne'crs.  It  might  see-nre  price's,  make  the  pric;  s  more  certain, 
the  pav  more1  e-e-rtain.  ]t  is  hette  r  to  de-al  with  a  combination  of 
dealers  than  with  them  individually.  They  are  more  responsible. 
But  the-  fact  is  that  they  are  not  combined  together;  they  are  e-om- 
poseel  of  individual  ele  alers  that  only  ae-1  in  concert  on  the  price. 
Whrn  the  deale  rs  get  together  to  fix  a  price  to  the  produce  r.  which 


Xo.  45.]  57 

he  has  no  voice  in  fixing,  it  would  destroy  competition  of  course, 
and  it  would  be  a  detriment  in  that  way.  I  should  say  that  they 
would  try  to  get  the  lowrest  price  possible.  I  don't  think  they  have 
any  separator  in  Bordeii's  plant,  but  know  they  have  none  in 
Howell's.  We  have  a  cheese  and  butter  factory  in  our  vicinity 
and  I  regard  it  as  very  important  for  competition.  There  i-/  not 
very  much  variation  between  Borden's  and  Exchange  prices.  I 
think  Borden  is  a  little  ahead. 

EDWARD  J.  BROWN  : 

I  reside  near  Angola,  twenty  miles  from  Buffalo.  I  have  been 
a  farmer  all  my  life  and  produce  milk.  My  farm  is  exclusively 
a  dairy  farm.  Have  about  twenty-three  cows.  Our  milk  is  sent 
to  the  city  of  Buffalo.  From  M.ay  1,  1908,  to  May  1,  1909,  we 
produced  11,788  gallons.  Estimated  cost  was,  gluten  $56'S. 40; 
forty  tons  of  hay  at  $!)  a  ton,  $860;  com,  $91;  twenty-two  tons 
of  silage,  $38.40.  Then  we  have  to  buy  the  tickets  and1  they  re- 
turn to  us.  They  returned  us  $176.82.  We  have  to  buy  the 
tickets  and  put  them  on  to  the  stand,  the  shipping  tickets,  l^c, 
a  gallon.  We  received  13e.  for  the  milk,  and  14-Jc  with  the  tick- 
ets, delivered  in  Buffalo.  We  get  13c.  in  the  country,  or  14-lc.  in 
the  city,  a  gallon,  that  is,  when  we  deliver  a  gallon  of  milk  to  the 
oreumiry  they  give  us  lot-,  and  a  ticket,  which  re-presents  He.  a 
gallon,  and  when  the  milk  reaches  the  city  we  cash  those  tickets, 
and  they  send  us  a  check  for  13c.,  plus  the  tickets.  The  cost  of 
production  as  near  as  1  could  get  was  $1,2(>4.()2.  We  did  not  in- 
clude the  cost  of  help.  I  and  my  brother  own  the  farm  anel  do  all 
of  our  own  work.  The  cost  of  labor  on  that  farm  woulel  cost  about 
$90  a  month.  The  total  cost  would  be  $1,264.62,  plus-  $1,080  for 
labor.  I  have  not  figured  in  capital  invested  or  depreciation. 
My  farm  woulel  rent  for  about  $350  a  year.  You  look  at  this  a 
little  elifferent  than  we  woulel  in  figuring  the  cost,  but  from  your 
figures  that  would  make  the  total  cost  of  production  $2,694.62. 
We  receive  for  all  the  milk  we  produce  $1,709.06.  From  my  way 
of  figuring  the  cost  of  production  is  no  more  than  what  I  receive 
for  the  milk.  I  actually  receive  over  and  above  what  it  costs  me 
for  the  milk,  $444.44.  The  cost  to  produce  was  about  2fc.  a 
quart  for  the  whole  year.  I  think  we  should  have  a  profit  of  2c. 
a  quart  above  all  expenses.  I  think  the  profit  ought  to  be  ^c.  to 


58  [SEX ATE 

ijc,  I  sell  my  milk  to  C.  W.  Huppuch.  He  is  a  dealer  in  the 
city  of  Buffalo.  The  Western  Xew  York  Milk  Producers'  Asso- 
ciation meets  every  year  and  figures  to  see  what  we  could  make  it 
for  and  set  the  price  as  near  as  we  think  ought  to  be  right.  In 
our  part  of  the  State  the  producers  fix  the  price  to  the  dealer. 
We  do  not  fix  any  established  price.  We  fix  a  price  as  near  as 
we  think  we  ought  to  get  or  as  near  as  we  can  get  and  then  every- 
body sells  for  what  they  have  a  mind  to.  I  am  a  member  of  that 
producers'  association.  We  fix  the  price,  not  by  the  month,  but 
the  year  round.  It  is  about  the  same.  Sometimes  we  get  12| 
for  six  months  and  13J  for  the  other  six  months.  Generally 
speaking,  we  get  a  uniform  price.  In.  Buffalo  we  also  have,  what 
you  might  say,  a  combination  among  the  dealers  and  we  are  on 
the  fight  all  the  while. 

STEWART  S.  COMFORT  : 

I  reside  near  Waverly,  Tioga  county,  Xew  York.  With  the 
exception  of  four  years,  I  have  been  a  farmer  all  my  life.  My 
farm  is  265  miles  from  Xc\v  York  city,  operated  exclusively  as 
a  dairy  farm.  I  keep  about  twenty  cows,  milking  on  an  average 
about  eighteen,  throughout  the  year.  During  the  year  1909,  I 
produced  r>0,oS2  quarts  of  milk.  The  total  cost  of  production 
was  $1,576.47.  The  items  entering  into  the  cost  of  production 
were  grain,  silage,  hay  and  hauling.  The  seventeen  tons  of  grain 
cost  $510,  ninety  tons  of  silage,  $450.  Thirty-three  tons  of  hay, 
$450.  Hauling  milk  at  8^-c.  a  can  cost  $121.47.  In  that  cost  I 
have  not  included  labor,  charge  for  cattle  during  the  summer,  de- 
preciation, repairs  to  buildings  and  interest  on  investment  of  capi- 
tal and  in  cows  and  also  the  farm  buildings  and  the  farm.  It 
cos-t  on  an  average  to  produce  a  quart  of  milk  in  1909,  $.0246, 
without  the  charges  for  labor,  etc.,  above  set  forth.  Including  the 
above  charges,  it  could  not  be  produced  for  less  than  3c.  You 
also  have  to  count  sickness.  You  have  got  to  turn  off  from  three 
to  four  cows  every  year.  That  is  my  experience.  In  order  to 
realize  a  reasonable  profit,  in  my  opinion,  I  should  have  Ic.  a 
quart  profit  over  the  three  and  a  fraction.  If  I  was  receiving  4c. 
a  quart  throughout  the  year,  I  would  consider  that  I  was  making 
a  reasonable  profit.  I  have  not  obtained  anywhere  near  4c.  on 
an  average  in  the  past  ten  years.  It  is  my  opinion  that  I  have 


'No.  45.]  59 

sold  my  milk  at  about  cost.  In  making  up  the  total  amount  of 
money  that  I  received  for  the  milk  during  1909,  let  me  add  that 
I  had  back  from  our  station  80  per  cent,  of  the  milk  that  we  send 
in  the  form  of  skimmed  milk.  By  careful  experimentations  one 
year,  I  found  that  that  skimmed  milk  was  worth  to  me  about  20c. 
a  hundred  pounds.  Adding  to  that  value  of  the  skimmed  milk 
which  is  $26.46,  adding  to  that  the  value  of  the  calves,  which  I 
value  at  $25  a,  piece,  the  total  is  $1,933.57,  making  the  total 
amount  that  I  received.  I  sold  my  milk  to  James  H.  Owen,  who 
lias  a  private  creamery  at  Chemung,  X.  Y.  I  am  selling  at  ex- 
change prices  now.  For  April,  May,  June  and  July,  I  was  to  get 
the  Exchange  price,  less  16c.  and  the  other  eight  months  I  was  to 
get  Exchange  price  less  6c.  We  are  in  the  32c.  zone  and  all  of  the 
milk  that  is  bought  in  our  section  is  on  6c.  and  16c.  off.  Previous 
to  the  first  of  October  our  milk  was  taken  at  the  creamery  on  the 
"butter  fat  test,  called  the  Babcock  test,  and  they  paid  us  accord- 
ing to  the  butter  fat  in  the  milk.  Most  of  the  farmers  in  my 
locality  sell  to  the  creameries,  6c,  off  for  six  months  and  16c.  off 
for  six  months.  They  do  not  get  the  full  Exchange  price  because 
the  freight  rate  is  6c.  extra.  If  a  farmer  in  my  locality  thought 
that  the  Exchange  price  or  the  Borden  price  was  too  low,  he  would 
liave  to  keep  his  milk  at  home  as  the  private  creamery  had  stopped 
running  and  you  can't  get  a  responsible  firm  or  dealer  in  Xew 
York  to  handle  milk  independently.  You  can  sell  it  but  you  can't 
get  satisfactory  pay  for  it.  I  know  of  one  instance  where  a  man 
is  selling  to  some  small  firm  in  Brooklyn,  and  he  told  me  he  was 
$700  behind.  I  understand  that  all  the  responsible  dealers  in 
"New  York  city  insist  on  buying  milk  at  either  Borden  or  Ex- 
change prices.  Taking  it  on  an  average,  I  think  the  Borden's 
and  Exchange  price  will  average  about  the  same  throughout  the 
year.  If  Borden  should  put  out  a  price  of  milk  for  $2  a  hundred 
pounds  three  months  after  and  at  that  time  there  was  a  great 
ilush  of  milk  in  the  market,  $2  a  hundred  would  not  represent 
the  value  of  milk  according  to  the  law  of  supply  and  demand  and 
that  would  show  that  the  price  of  milk  as  established  is  an  arbi- 
trary price  and  not  dependent  upon  the  supply  and  demand.  Bor- 
den's  is  an  arbitrary  price.  They  set  it  six  months  in  advance. 
The  Exchange  is  not  set  six  months  in  advance.  The  New  York 


00  [SK.XATI-: 

Dairy  Produce  Company  have  a  criamery  in  Chciming.  I  tin<[ 
the  price  they  arc  going  to  pay  from  the  "  (Country  Gentleman/' 
the  "American  Agriculturist,"  and  the  '"  Milk  Reporter,"  and  they 
all  have  a  column  which  is  entitled  "  Exchange  prices  "  and  in 
that  column  is  s<  t  forth  the  prices  that  have  been  established  by 
the  Consolidated  Milk  Exchange  for  milk.  There'  is  no  doubt  in 
my  mind  when  1  see  an  Exchange1  price  but  that  I  will  get  that 
price  for  my  milk,  less  the  amount  .as  charged  in  freight  zone. 
Following  are  the  av(  rage  prices  I  received  for  butter  fat  when 
1  -old  my  milk  by  test:  1DOD,  January,  3.">  ;  February,  -'J2  ;. 
March,  :}();  April  :>S^;  May  ±1 \\  -June,  •>:>  ;  July,  26;  August, 
30;  September,  30  2/10.  That  price  is  for  a  pound  of  butter 
fat.  Tn  1008,  January,  43;  February,  40;  March,  3:>  ;  April, 
26;  May,  23i  ;  June,  i>3i  ;  July,  24- ;  August,  2S  ;  September,  32; 
October,  38;  Xovc  mbe-r.  3S ;  December,  41.  In  1007,  January. 
38;  February,  3:> ;  March,  36J ;  April,  31;  May,  2.-).]-;  June,  25; 
July,  2T.J.  ;  August,  34  i;  September,  37;  October,  41;  November, 
41;  December,  41.  The  above  figures  represent  cents  per  pound. 
As  a  practical  producer  of  milk,  1  would  state  that  if  it  is  good 
and  clean,  it  begins  to  deteriorate  in  about  forty-eight  hours  after 
it  has  been  taken  from  the  cow.  If  there  was  no  combination 
among  the  dealers  in  New  York  city  to  tix  or  control  the  price 
paid  by  them  to  the  producers  of  milk,  why  would  one  dealer  bid 
up  when  lie  is  a  little  short.  They  never  do;  when  the  dealers  all 
buy  on  the  same  price,  tin  re  is  an  agn  ement  somewhere.  As  to 
my  knowledge  of  a  combination  or  agreement  among  the  'dealers 
in  X(W  York  city,  to  tix  or  control  the  price  to  be  charged  by 
them  to  the  consumer,  how  did  it  happen  that  they  all  raised  from 
8c.  to  DC.  at  the  same  time  it'  there  was  not  any  agreement.  That 
would  incline  me  to  believe  that  there  was  an  agreement.  I  don't 
know  anything  about  it  personally.  I  am  of  the  opinion  that  the 
existence-  of  this  Consolidated  Milk  .Exchange  is  not  beneficial  to 
the  producer.  If  each  one  had  to  make  their  independent  price, 
I  think  there  would  be-  a  chance  for  them  to  bid  up.  In  my  mi  ml, 
there  is  practically  no  competition  in  the  milk  trade  in  my  county. 
I  believe  that  this  state  of  the  milk  trade,  eliminating  all  compe- 
tition, is  due  to  the  fact  that  the  Milk  Exchange  fixes  prices,  which 
are  about  the  same1  as  Bord'en's  pi-ices.  I  wish  to  correct  myself. 


Xo.  45.]  01 

Tlu -rr  is  one  part  of  the  county  at  Wellsbilrg,  the  Xewark  Milk 
vV  (Yearn  Company  runs  a  receiving  plant,  a  condensory,  but  their 
prices  are  practically  Exchange  prices.  It  is  my  opinion  that  it 
is  the  custom  in  my  county  of  taking  milk,  delivering  it  at  the 
err  ami  ry.  put  it  through  a  separator,  and  then  reunite  a  portion 
of  the  cr<  am  with  the  milk  so  as  to  make  a  milk  that  is  just  above 
the  3  per  cent,  butter  fat,  and  retaining  the  excess  of  cream  and 
sending  the  milk  to  the  New  York  market.  There  would  not  be 
any  object  in  oft'rriug  a  premium  for  milk  that  has  an  excess  of 
butter  fat  in  it  if  they  are  going  to  sell  their  milk  as  fluid  milk. 
Of  my  own  kuowh  di»r,  I  do  not  know  of  any  creamery  in  my 
locality  where  this  separating  is  carried  on.  I  think  that  in  an 
average  year  44c.  would  bo  a  fair  price  to  the  farmer,  or  4c.  in 
tin  summer  and  5c.  in  the  winter. 

HEKBEKT  E.  COOK: 

1  am  a  farmer  and  cheese  and  butter  maker,  and  am  dean 
•of  the  School  of  Agriculture  of  St.  Lawrence  University,  and 
have  been  connected  in  that  capacity  since  September  1,  1909.  1 
have  been  connected  with  the  State  Department  of  Agriculture 
for  a  number  of  years.  My  farm  is  located  at  Denmark,  Lewis 
Bounty.  I  live  at  Canton.  Milk  is  my  chief  product.  I  produce 
about  4,500  quarts  per  cow  from  40  cows ;  that  would  be  a  total 
of  about  180,000  quarts  in  a  year.  Approximately,  if  all  the 
expenses  put  upon  a  cash  basis,  present  prices  of  labor  and  cost 
of  investment,  I  should  say  it  would  approximate  very  closely  to 
4c.  a  quart  to  produce  milk.  It  will  cost  more  to  produce  milk 
showing  5  per  cent,  butter  fat  than  milk  with  3  per  cent,  butter 
fat.  In  my  opinion,  the  cost  of  production  of  milk  would  be : 
interest  on  the  investment,  labor  and  feed.  If  the  interest  on  the 
investment,  included  the  depreciation  of  the  property,  why  those 
items  would  practically  cover  the  cost;  if  they  did  not,  then  the 
•depreciation  on  the  property,  the  keeping  up  of  buildings  and 
machinery  and  the  loss  yearly  in  the  dairy,  which  is  a  very 
important  item.  We  are  employing  in  our  school  work  a  book- 
keeper at  $1,200  a  year.  I  do  not  think  that  he  is  doing  any 
more  work  than  would  be  required  to  determine  accurately  the 
•cost  of  producing  the  milk  and  the  products  of  my  farms.  I 
think  a  fair  price  for  the  producer  to  get  for  his  milk  would  be 


62  [SENATE 

10  per  cent,  above  full  cost.  I  sell  my  milk  to  Sam  Levy.  Our 
price  is  fixed  by  the  price  paid  at  Deer  River  and  Carthage,, 
and  those  prices  are  fixed  on  the  Exchange  price,  which  fixes- 
our  price.  In  other  words,  our  price  is  practically  the  Exchange 
price.  I  have  a  written  contract  with  Levy  only  for  the  winter. 
In  summer  our  milk  is  manufactured  into  whatever  we  choose. 
Our  contract  is  based  upon  Deer  River  prices  and  Deer  River 
prices  are  based  upon  New  York  Exchange  prices.  Borden's 
operate  a  creamery  in  Northern  New  York.  I  recall  only  two  in 
St.  Lawrence  county;  there  may  be  more.  None  in  my  immedi- 
ate vicinity.  I  do  not  think  that  during  the  last  two  or  three 
years  Borden's  price  and  the  Exchange  price  have  materially 
varied;  perhaps  slightly  in  favor  of  Borden  prices,  but  prior  to 
that  there  was  a  very  distinct  variation.  I  know  the  Bordeii 
prices  are  made  six  months  in  advance.  I  suppose  there  might 
be  a  combination  among  the  milk  dealers  in  New  York  city 
to  control  or  fix  the  price  to  the  producer.  I  think  that  might 
be  the  human  equation  in  the  situation  if  they  could,  but  I 
don't  know.  I  base  my  opinion  on  the  general  proposition  of 
the  tendency  of  human  nature  to  get  together.  It  is  the  spirit 
of  the  times  to  relate  and  co-ordinate  and  federate.  On  that 
basis  I  should  say  that  there  was  a  chance  that  they  were  —  I 
don't  suppose  those  men  are  fighting  each  other.  I  think  the 
prices  and  the  situation  in  the  country  are  more  satisfactory  than 
they  were  when  there  was  a  strong  warring  element  among  milk- 
men in  New  York  city.  I  regard  a  situation  in  which  a  number 
of  dealers  combine  together  to  fix  the  price  to  the  producer 
with  their  natural  interest  to  fix  as  low  a  price  as  possible 
detrimental  to  the  producer  on  general  principles,  as  that  would 
mean  danger  to  the  man  with  whom  they  were  dealing.  I  do  not 
know  whether  there  is  any  understanding  between  Bordens  and 
the  Exchange  in  reference  to  the  fixing  of  the  price.  I  think 
every  one  knows  that  the  skimming  of  milk  was  dons  so  that  it 
still  came  within  the  12  per  cent,  solids  and  3  per  cent,  butter 
fat,  and  was  very  common  in  the  winter  time  over  those  sections 
where  the  milk  contained  more  than  a  normal  amount  of  butter 
fat.  I  think  there  have  been  two  or  three  indictments  in  Lewis 
county  within  the  last  two  years  for  skimming  milk.  The  De- 


No.  45.]  63 

partment  of  Agriculture  made  a  general  inspection,  if  I  under- 
stand right,  of  the  creameries  which  takes  into  consideration  the 
sanitation  of  the  plant  and  the  condition  of  the  milk  and  its- 
delivery  to  the  consumer  in  its  normal  and  legal  condition,  and 
I  think  this  is  one  of  the  reasons  why  the  practice  of  skimming 
has  been  done  away  with.  In  my  opinion,  cream  would  separate 
more  quickly  from  milk  if  it  had  once  been  separated  by  a  sepa- 
rator and  then  re-united.  I  would  not  consider  that  this  would 
lessen  the  value  or  change  the  value  of  the  milk  in  any  way  for 
human  food  because  the  »very  slightest  agitation  would  re-incor- 
porate the  cream  with  the  other  solids  of  the  milk.  At  one  time,, 
some  years  ago,  the  Howell  people  in  Lowville  carried,  a  quantity 
of  cream  all  summer,  but  I  understand  that  the  results  were  so 
very  unsatisfactory,  and  I  know  they  kept  their  churns  running 
in  the  fall  and  they  churned  cream  not  of  the  best  quality  for 
a  good  many  days,  and  I  have  never  known  of  that  practice  being 
followed.  If  milk  is  bacteriologically  clean  —  if  it  is  free  from 
germ  life  —  it  can  be  put  into  a  bottle  and  immersed  in  ice 
water  and  kept  a  long  time. 

Q.  Have  you  any  remedy  to  suggest  for  the  present  situation 
in  which  the  producer  finds  itself,  selling  milk  at  cost,  so  that 
the  producer  realizes  a  fair  profit  for  his  milk  and  at  the  same 
time  the  consumers  get  a  good  article  at  a  reasonable  price?  A. 
By  putting  every  cow  on  her  ability  to  make  milk  at  a  profit  in 
the  hands  of  the  owner. 

I  mean  if  it  cost  4c.  a  quart  with  the  cows  in  a  certain  dairy 
and  a  man  cannot  get  5c.,  I  could  go  out  of  business.  If  he 
could  produce  it  for  3c.  he  -could  sell  it  for  3|c.  I  think  that  is 
the  solution  —  the  placing  of  every  cow  upon  her  ability  in  the 
hands  of  the  owner  to  produce  milk  at  a  profit.  That  would 
probably  decrease  the  number  of  cows.  It  would  seem  to  me 
that  the  transportation  of  milk  at  32c.  a  can  is  out  of  proportion 
to  the  first  cost  of  the  milk.  Now,  we  are  getting  $1.80  a  hundred 
pounds  and  it  cost  32c.  to  produce  $1.80  worth.  Now  in  the  sum- 
mer time  the  price  would  be  very  much  lower,  so  that  it  will  cost 
between  J  and  J  of  the  first  cost  of  the  commodity  in  the  country 
to  transport  it  to  New  York.  It  seems  to  me  that  it  is  out  of 
proportion  to  the  cost  of  material  based  on  the  cost  of  transport- 


04:  [ 

iii«-  them.  Milk  is  cheaper  than  meat  but  higher  than  wheat 
and  com  products.  A  quart  of  milk  at  15c.  a  quart  at  4  per  cent, 
butter  fat,  with  the  attendant  solids  would  furnish  as  much  di- 
gestible nutrition  as  beef-steak  would  furnish  at  18c.  That  would 
be  'Jc.  in  favor  of  milk  and  milk  is  very  much  cheaper  now.  On 
an  average,  I  would  say  that  milk  is  more  expensive  than  the 
average  food  product. 

(Later  lie  changes  his  testimony  and   says:) 

I  would  not  think  it  was  more  expensive  nt  J)c.  a  quart  to  the 
consumer  in  New  York  city  than  other  food  products.  In  my 
section  and  all  through  northern  New  York,  cheese  factories  and 
butter  factories  furnish  competition  for  the  milk  dealer.  The 
shipiiH  nt  of  milk  to  New  York  does  not  represent  the  sjuue  per- 
centage of  the  total  production  of  milk  that  it  does  tn  the  older 
shipping  sections.  The  cheese  factories  are  called  co-operative 
institutions,  but  in  tlie  real  senese  of  being  co-operative  institu- 
tions, there  are  not  many  of  them.  They  are  owned  by  an  in- 
dividual and  he  takes  the  milk  on  commission  and  makes  it  for  so 
much  per  hundred  pounds  of  product.  Very  few  farmers  in 
northern  New  York  e.wn  any  portion  of  the  factory. 

AI.MO.X    U.    KASTMAN  : 

I  own  two  farms  in  the  neighborhood  of  Deansville,  New  York, 
and  let  both  out  to  tenants,  but  suppose  I  am  a  farmer  as  that  is 
the  only  business  that  I  have  had  for  thirty-five  or  forty  years. 
I  have  dairies  upon  both  farms.  .1  have  no  figures  to  base  an 
opinion  on  as  to  what  it  would  cost  to  produce  a  quart,  of  milk. 
There  are  so  many  contingencies,  differences,  etc.,  that  must  be 
figured  in.  I  would  say  that  -le.  is  nearer  right,  than  3c.  You 
must  take  into  consideration  the  loss  of  cows  through  sickness, 
etc..  and  labor,  buying  utensils,  and  repairs  upon  buildings  hous- 
ing the  cows.  From  one  farm  the  milk  went  to  a  condensory  at 
Deansville,  Xew  York,  a  distance  of  about  four  or  five  miles.  I 
think  it  was  called  the  International.  There  are  no  other  cream^ 
eries  near.  Borden's  is  at  Waterville,  and  there  is  a  shipping 
station  at  Xorth  Brookfield  called  the  High  Ground  Dairy  Com- 
pany, both  of  which  are  accessible  to  one  farm.  I  think  the  High 
Ground  Dairy  Company  is  a  Brooklyn  concern  as  I  know  that 


~No.  45.]  65 

during  the  panic  in  Brooklyn  it  was  some  months  before  they 
were  able  to  pay  any  money.  I  do  not  know  whether  I  sold  the 
milk  to  Borden's  at  exchange  prices.  I  have  no  information  on 
that.  I  signed  a  contract  when  I  sold  my  milk,  but  it  was  not 
as  long  as  the  contract  with  Borden's;  that  is,  when  the  contract 
was  made  I  was  in  Europe  and  the  man  on  the  farm  signed  a 
contract.  Borden's  make  their  prices  six  months  in  advance,  but 
I  have  not  kept  tract  of  the  Exchange  prices.  I  have  talked  with 
my  men  on  the  farm  and  they  said  if  they  could  get  on  an 
average  of  from  4^c.  to  4-Jc.  there  would  be  a  little  profit  in  it 
for  them,  that  is,  over  and  above  the  expenses.  But  I  do  not 
think  they  would  come  out  even  if  they  figured  it  right  down. 
The  general  opinion  in  my  vicinity  is  that  milk  is  at  present 
being  sold  a  little  below  cost  price,  with  the  feeds  and  the  labor 
question,  the  latter  of  which  is  a  difficult  one.  We  dare  not 
trust  ordinary  helpers  on  the  farm  to  go  in  and  feed  and  take 
care  of  the  dairies. 

Q.  Have  you  any  comment  to  make  on  the  situation  where 
a  farmer,  a  producer,  is  only  paid  on  an  average  throughout  the 
year  of  about  three  and  a  third  cents  for  producing  milk,  going 
through  all  the  various  forms  of  work  and  expenditures  necesr 
sary  to  produce  the  milk,  and  that  the  middle  man  who  merely 
transports  that  milk  from  the  producer  to  the  consumer  gets  five 
and  two-thirds  cents  a  quart  ?  A.  Why  the  only  comment  is  that 
it  seems  as  though  there  ought  to  be  in  some  way  a  more  equal 
division.  Whether  it  is  possible  or  not  to  do  that,  I  don't  know. 
Of  course  I  have  no  idea  of  what  it  costs  to  transport  milk  to 
Xew  York,  nor  the  expenses  that  the  shipping  stations  of  Borden's 
are  under;  I  have  no  knowledge  of  that;  I  only  know  that  pro- 
ducers are  not  getting  any  profit  out  of  it.  That  is,  when  you 
figure  profit  as  it  should  be  figured. 

I  have  no  suggestions  to  make  as  to  how  the  situation  can  be 
remedied.  It  looks  to  me  as  if  there  was  a  tacit  understanding 
among  the  dealers  to  fix  and  control  the  price  to  be  paid  by 
producers.  My  knowledge  comes  exclusively  from  reading  the 
papers  and  conversations  I  have  had.  I  see  the  quotation  of  the 
Exchange  prices  and  the  prices  that  are  paid  by  the  Borden's  and 
they  run  very  closely  together.  I  have  no  knowledge  of  a  eom- 
3 


66  [SENATE 

bination  existing  in  New  York  city  among  the  dealers  to  raise 
the  price  of  milk  from  eight  to  nine  cents  about  November  1, 
1909,  but  I  simply  read  that  the  price  had  been  raised,  which 
seemed  a  little  singular  that  it  should  be  so  soon  after  the  price 
had  been  fixed  to  the  producer.  It  looked  as  though  the  producer 
was  getting  quite  his  share  of  it;  but,  of  course,  we  have  no  re- 
course. I  never  heard  any  conversation  among  dealers  prior  to 
November  1,  1909,  in  which  they .  referred  to  the  necessity  or 
advisability  of  raising  the  price.  I  cannot  answer  as  to  whether 
the  Consolidated  Milk  Exchange  is  beneficial  or  otherwise  to  the 
producer.  I  have  never  known  any  of  its  members.  If  I  became 
dissatisfied  with  the  price  that  Borden's  offered  me  I  suppose  1 
would  have  to  make  it  into  butter,  as  we  have  no  factory  where 
we  could  go  to.  I  have  no  personal  knowledge  that  the  owners  of 
creameries  separate  cream  from  the  milk  and  then  reunite  enough 
cream  with  the  milk  so  that  it  has  3  per  cent,  butter  fat  and 
thereby  save  the  excess  of  cream.  I  do  not  know  how  long  the 
creameries  keep  milk  or  cream.  I  have  no  comment  to  make  on 
the  size  of  the  freight  rate  at  the  present  time  for  milk  in  the  freight 
zone.  It  looks,  though,  the  freight  rate,  the  amount  that  they  get 
from  each  carload  of  milk,  was  more  in  proportion  to  what  it  is 
of  other  freight.  O  course,  I  have  no  knowledge  of  the  expense 
of  running  trains  and  I  should  not  want  to  criticize  them.  '  I 
have  felt  that  in  many  respects  the  Borden  people  have  done  a 
grand  good  thing  for  the  dairymen  in  those  districts  where  they 
have  located.  They  are  entitled  to  a  good  deal  of  credit  for  many 
things  for  they  have  compelled  the  dairymen  to  adopt  much 
better  methods  in  the  care  and  cleanliness  of  the  handling  of  their 
milk.  It  has  seemed  a  little  arbitrary  but  nevertheless  it  has  been 
really  a  good  thing  and  beneficial  for  the  dairymen  who  made  the 
changes  so  far  as  that  is  concerned.  Of  course,  those  changes 
and  that  work  which  they  have  done  has  added  in  the  expense, 
and  it  ought  to  have  added  a  little  more  to  the  price  of  milk  to 
meet  those  various  expenses  to  the  producer. 

GEORGE  H.  GREAVES  : 

I  reside  at  Whitney's  Point,  New  York,  about  250  miles  from 
New  York,  in  Broome  county,  and  have  been  a  farmer  nearly  all 
my  life.  I  am  running  two  farms  at  the  present  time.  The  fig- 


No.  45.]  67 

nres  that  I  have  prepared  relate  to  only  one  farm.  I  have  about 
thirty  milking  cows.  I  carry  about  thirty-eight  cows  in  order  to 
have  thirty  for  milk.  I  produced-  about  58,400'  quarts  of  milk 
during  the  year  1909.  The  total  cost  of  production  was  about 
$1,752.  Items  entering  into  the  costs  were  price  of  cow,  keeping, 
care  and  feed,  labor,  milking,  delivering  milk  to  station,  cost, 
care  and  construction  of  utensils,  interest  on  investment  and  de- 
preciation. Cost  of  cow  $7:5  to  $100,  keeping,  care  and  feed-  $65, 
labor,  milking  and  delivering  milk  $12.50,  care  and  construction 
of  utensils  $2.50,  interest  on  investment  and  depreciation  $10'.  I 
average  what  it  costs  a  quart  to  make  this  milk.  I  calculate  fifty 
tons  of  hay  at  $15  a  ton,  making  $750,  $600  for  feed,  $400  for 
hired  help,  that  makes  a  total  of  $1,752.  I  reckon  the  cost  of  pro- 
el  notion  of  a  quart  of  milk  during  that  year  was  about  3c.  The 
average  production  of  better  class  of  dairy  cows  will  not  exceed 
6,000  pounds  or  3,000  quarts  of  milk  per  year,  which  at  3c.  a 
quart  would  be  $90,  just  covering  the  cost  of  production.  I  would 
consider  Ic.  a  reasonable  profit  on  a  quart.  I  think  that  I  should 
get  on  an  average  of  4c.  a  quart  to  make  a  reasonable  profit,  At 
the  present  time  I  sell  my  milk  to  the  Page  Creamery  Company* 
and  until  Horde  us  came  there  they  took  the  milk  at  the  New  York 
Milk  Exchange  price.  Previous  to  that  I  sold  at  the  Milk  Ex- 
change price.  The  price  of  the  milk  produced  in  the  State  of 
New  York  that  is  not  sold  on  Borden's  contract  is  sold  on  the 
prices  of  the  New  York  Milk  Exchange  at  the  producers  shipping 
point,  less  one-half  or  one-quarter  of  a  cent  a  quart,  as  a  person 
can  make  his  contract.  If  the  milk  is  shipped  from  the  32c.  zone, 
30c.  for  freight,  5c,  for  ferriage,  20c.  or  lOc.  per  can  for  hand- 
ling at  the  station  for  each  forty  quart  can,  anel  the  farmer  gets 
what  is  left ;  for  instance,  the  present  price  of  the  New  York  Milk 
Exchange  is  $2.01.  We  are  in  a  32c,  zone,  therefore  they  deduct 
37c.  and  20c.  for  hanelling,  making  57c.  anel  the  farmer  gets 
$1.44  or  $1.54  per  can,  anel  then  this  they  would  call  the  price 
which  is  posted  at  the  station  where  the  milk  is  delivered  as  the 
New  York  Milk  Exchange  price.  The  Exchange  changes  the 
price  and  the  price  is  posted  at  the  station.  I  think  the  majority 
or  nearly  all  milk  is  sold  at  either  Borden's  or  Milk  Exchange 
prices.  About  one^-half  as  much  again  is  sold  at  Exchange  as  is 


68  [SENATE 

sold  at  Borden's  price.  In  other  words,  about  one-third 'to  two- 
thirds.  Previous  to  Borden's  coming  in  there,  they  came  in  there 
and  restricted  us  on  what  we  would  feed,  then  this  other  party 
gave  us  the  same  as  the  Bo rd MI'S  without  any  conditions  in,  less 
4<?.  That  is  the  way  we  get  our  price  now.  J  >y  the  other  party  I 
moan  the  Page  Creamery  Company.  Wk-n  I  made  a  contract 
with  the  dealer  to  sell  to  him  at  Exchange  prices  throughout  a 
certain  year,  I  did  not  have  anything  to  say  as  to  what  prices 
the  Exchange  should  establish  during  that  year.  I  have  one  of 
the  contracts  here.  It  is  based,  I  think,  on  the  Exchange  prices. 
I  have  one  thing  in  my  mind  that  will  lead  me  to  believe  that 
there  exists  a  combination  among  the  dealers  in  New  York  city 
to  fix  or  control  the  price  of  milk  paid  by  them  to  the  producer. 
The  difference  in  price  that  they  pay  the  producer  and  the  differ- 
ence in  price  which  the  consumer  pays  would  lead  me  to  believe 
that  there  must  be  a  fixed  price  or  something  similar  in  order  to 
force  this  price,  in  other  words,  the  little  price  that  the  farmer 
gets  and  the  irreater  pi-ice  that  the  consumer  pays,  there  is  some- 
thing wrong  somewhere,  whether  you  call  it  a  milk  trust  or  not, 
I  am  not  able  to  say.  I  do  not  think  I  got  as  much  as  3jc.  for  my 
milk  (luring  1909.  When  the  middle  men  get  5|c.  and  the 
farmer  only  gets  -J.'.c.,  1  would  say  that  it  was  bankruptcy  for  the 
farmer  and  making  millionaires  of  the  middle  men.  That  is  the 
way  it  looks  to  me.  I  am  speaking  of  my  own  experience.  As 
far  as  knowing  anything  about  the  existence  of  a  combination 
among  the  dealers  in  Xe\v  York  to  fix  and  control  the  price 
cliargvd  by  them  to  the  consumer,  I  know  things  in  my  own  mind 
but  I  would  not  feel  like  swearing  to  them.  In  explanation  of 
little  things  in  my  mind,  I  wrould  say  that  they  are  only 
things  that  I  would  gather  up  and  put  together,  little  threads  of 
injustice  done  to  men  that  have  started  in  there  and  went,  put  in 
the  milk  business  that  eventually  has  been  run  out  and  as  you 
mi^lit  say,  lost  everything  they  had.  People  have  started  in  there 
and  the  way  they  have  been  used  and  treated  and  the  way  that 
the  business  has  been  run  has  led  me  to  believe  that  there  is 
something  besides  fair  play  in  the  milk  business  In  regard  to 
the  combination  fixing  the  price  of  milk  and  raising  it  on  Xoveni- 
Jber  1st,  there  isn't  anything  that  I  could  swear  positively,  only 


No.  45.]  69 

that  they  did  raise  the  price  of  milk  and  it  was  unjust  and  un- 
manly for  them  to  do  it,  and  they  must  have  had  a  combination 
in  order  to  force  the  price  of  milk  to  9c.  and  pay  the  farmer  abso- 
lutely nothing.  It  is  a  hard  matter  to  answer  that  when  you 
really  believe  it  and  can't  tell  it.  As  a  producer  I  did  not  get  any 
portion  of  that  one  cent  advance  in  price  on  November  1st.  We 
never  get  any  advance  in  milk  •  they  simply  give  what  they  have  a 
mind  to  and  we  have  to  take  it.  I  am  getting  a  fraction  over  4c. 
a  quart  now.  Witness  later  says:  I  got  an  advance  of  about  Jc. 
a  quart  about  the  first  of  November,  which  has  been  a  custom 
for  several  years.  I  consider  the  existence  of  .a  milk  exchange 
which  fixes  the  price  of  milk  and  carries  on  operations  similar  to 
the  Consolidated  Milk  Exchange  detrimental  to  the  farmer  be- 
cause it  establishes  the  price  so  low  that  the  farmer  cannot  live 
by  it.  If  the  Exchange  establishes  the  price  for  milk  we  have 
got  to  accept  it  or  keep  our  milk  or  give  it  to  Borden,  about  the 
same  thing,  though,  as  it  has  been  my  experience  that  the  Borden 
price  and  the  Milk  Exchange  price  average  throughout  the  year 
about  the  same.  If  the  Exchange  keeps  on  doing  business  this 
way  they  will  bankrupt  the  farmer;  they  will  have  more  aband- 
oned farms  and  depreciation  of  land  if  they  still  go  on.  Ten 
years  ago  I  sold  gluten  for  $10.80  a  ton.  To-day  it  is  worth  $30 
and  $32  to  $35  a  ton.  It  has  advanced  three  times  what  it  was 
worth  at  that  time  and  milk  has  not  advanced  more  than  a  cent 
and  hardly  that  per  quart  to  the  producer.  Hired  help  is  al- 
most double,  and  still  milk  has  not  advanced  to  correspond]  with 
that,  and  every  farmer  that  is  making  milk  to-day  at  Exchange 
price  is  making  it  at  a  loss  unless,  at  the  gentleman  said,  he  has  a 
family  of  his  own  that  can  do  the  work  and  live  within  his  means. 
I  understand  that  this  exchange  is  so  powerful  that  if  we  refuse 
to  take  its  prices,  we  will  be  unable  in  any  way  to  sell  our  milk, 
and  we  have  either  got  to  take  the  Exchange  price'  or  Borden's, 
which  is  about  the  same  as  the  Exchange  price.  The  Borden's 
and  the  Page  Creamery  Company  are  practically  the  only  con- 
cerns to  whom  I  could  sell  milk.  The  Pag©  Creamery  Company 
make  their  prices  six  months  ahead  and  they  have  no  reason  of 
knowing  what  the  price  of  cheese  or  butter  will  be  at  that  time 
and  the  price  of  milk  to-day  is  not  as  high  as  the  price  of  butter 


70  [SENATE 

to  the  producer.  The  Page  Creamery  Company  previous  to 
Bordens  coming  in  there  took  the  Milk  Exchange  prices.  2s  mv 
the  Bordens  came  there  and  make  them  six  months  ahead,  and 
they  follow  the  same,  only  4  cents  a  hundred  less.  I  know  that 
Bordens  and  the  Page  Creamery  Company  advanced  and  raised 
the  price  simultaneously  on  various  occasions.  The  trouble  is, 
they  all  work  together  and  we  cannot  tell  what  we  want  to  tell. 
There  are  no  other  creameries  or  butter  factories  where  I  could 
deliver  my  or  my  neighbor's  milk  nearer  than  six  miles 
and  that  is  not  available  to  me.  In  a  way  I  think  Bordens  and 
Page  Creamery  Company  are  competitors,  as  they  each  hold  out 
certain  inducements  to  get  all  they  can.  I  d'o  not  think  they 
work  together  to  keep  the  price  down.  I  know  that  Bordten  and 
the  other  dairy  that  operates  in  my  vicinity  use  a  separator  t<> 
separate  the  cream  from  the  milk.  I  do  not  know  whether  they 
reunite  the  cream  with  the  milk  or  not.  It  might  be  possible, 
although  it  does  not  seem  so,  with  the  pains  that  they  take  to 
keep  the  cream  out  and  the  facilities  they  have  of  straining  it, 
en  tor  ing  this  separator,  it  doesn't  seem  possible  that  they  would 
run  this  through  for  the  cleanliness  of  the  milk.  It  may  be  pos- 
sible" that  we  get  a  little  cleaner  milk.  I  know  at  the  time  that 
this  factory  was  run  under  the  system  of  the  Milk  Exchange 
prices  that  they  did  separate  cream  from  the  milk  and  sent  ten 
or  twehv  cans  of  cream  to  New  York  city  a  day.  They  also  sent 
milk.  The  creameries  in  my  vicinity  off(  red  premiums  for  milk 
that  had  an  excess  of  butter  fat.  They  bought  it  on  test.  They 
paid  higher  money  for  it.  It  gives  them  more  cream.  They  got 
more  cream  and  the  State  only  required  about  3  per  cent,  butter 
fat.  It  is  my  understanding  that  in  this  separating  process  the 
creameries  take  the  excess  cream  and  leave  in  the  milk  just  the 
3  per  cent,  that  is  required  under  the  laws  of  this  'State.  To 
sum  up,  I  would  state  that  it  is  my  understanding  that  the  object 
of  separating  the  milk  from  the  cream  and  then  reuniting  it 
would  be  to  draw  off  the  excess  of  cream  over  the  3  per  cent. 
butter  fat.  I  could  not  swear  to  it.  Bordens  fix  their  price 
April  and  October,  that  is,  they  establish  it  in  September  and 
March  and  commence  the  1st  of  October  for  six  months  and  the 
1st  of  April  for  six  months.  That  price  is  published  broadcast, 


No.  45.]  71 

and  I  know  what  the  price  is  going  to  be  for  six  months.  There 
does  not  seem  to  be  a  surplus  of  milk  in  the  farming  localities. 
The  only  thing  I  wish  to  say  in  reference  to  the  situation  of  the 
flush  in  New  York  city  at  the  present  time  is  that  they  are  trying 
to  raise  the  price  of  milk  now  and  that  might  account  for  the 
flush.  On  the  other  hand,  the  lack  of  it  in  the  farming  districts 
might  be  011  account  of  the  high  price  of  grain,  hired  help,  high 
price  of  hay  and  the  drought.  I  am  informed  that  they  have  a 
way  of  holding  over  this  flush  of  milk  and1  carrying  it  over  until 
they  can  use  it  in  New  York  city.  I  cannot  tell  how  it  is  done, 
but  I  have  been  told  that  it  has  been  done  right  along.  I  have 
been  told  by  a  milk  dealer  in  the  city  of  Binghamton  that  he 
held  milk  thirty  days  and  that  you  couldn't  tell  the  difference, 
in  fact,  I  had  a  sample  of  the  cream  and  I  pronounced  it  A-No.  1, 
and  it  was  said  to  have  been  held  thirty  days.  This 
man  had  something  put  in  the  cream,  some  preservative.  He  put 
this  preservative  in  and  also  used  ice.  I  would  not  say  that 
milk  that  has  been  kept  ten  or  twelve  days  is  a  proper  article  for 
food.  I  know  all  of  our  farmers  are  not  satisfied  with  the  Ex- 
change and  Borden's  prices,  but  they  cannot  ship  their  milk.  They 
could  not  sell  it  if  they  shipped  it.  They  could  hot  get  rid  of 
it  because  no  independent  dealer  can  sell  milk  in  New  York  city. 
He  has  no  show  of  selling  milk  there.  He  couldn't,  if  he  tried 
to.  T  am  in  freight  zone  32,  about  two  hundred  and1  fifty  miles 
from  New  York,  or  something  like  that.  I  consider  the  freight 
rate  very  high  as  compared  with  other  products  shipped  by  rail- 
road. In  my  judgment  railroads  are  anxious  to  obtain  shipments 
of  milk.  They  make  every  effort  to  extend  their  lines  out  to  the 
milk  districts. 


Ho  WELL: 

I  reside  at  Go-shen.  I  have  been  a  farmer  all  my  lifetime. 
I  am  a  producer  of  milk.  I  am  a  member  of  the  Consolidated 
Milk  Exchange.  I  do  not  remember  how  long.  I  was  a  member 
of  the  old  Milk  Exchange  Limited  when  it  was  dissolved,  also 
when  it  started  and  I  have  been  a  member  of  the  Consolidated 
since  it  was  organized,  after  the  old  Milk  Exchange  Limited 
was  disolved.  I  own  one  share  of  stock,  for  which  I  paid.  I 


72  [SENATE 

thought  it  was  advisable  for  me  to  subscribe  because  at  that  time 
we  thought  we  needed  somebody  to  make  a  price  for  milk.  As 
near  as  I  understand  it,  the  share  of  stock  was  simply  transferred 
from)  the  old  Milk  Exchange  Limited  to  the  share  of  stock  in 
the  Consolidated  Milk  Exchange.  We  thought  at  the  time  I 
became  a  stockholder  in  the  Consolidated  Milk  Exchange  that  it 
was  possible  for  a  price  to  be  placed  upon  milk  by  the  members 
of  the  Consolidated  Milk  Exchange.  We  thought  it  advisable 
to  have  a  price  fixed  by  the  Consolidated  Milk  Exchange  because 
the  farmers  wanted  to  be  represented  in  it.  We  wanted  to  send 
some  one  to  be  represented  in  our  part.  One  of  my  neighbors 
was  a  member  of  the  board  of  directors  of  the  Consolidated  Milk 
Exchange,  Henry  Young.  I  never  attended  a  meeting  of  the  di- 
rectors or  stockholders  of  the  Consolidated.  The  board  of  direc- 
tors of  the  Consolidated  made  the  price  for  milk.  If  the  board 
of  directors  of  the  Consolidated  should  raise  the  price  of  milk,  the 
price  to  the  persons  to  whom  I  sell  would  go  up.  Whatever  the 
price  was,  we  would  get.  If  they  lowered  the  price,  we  would  get 
that  much  less.  I  sell  my  milk  to  Rankin  Quell  of  Brooklyn  — 
about  140  quarts  a  day  at  present.  When  I  make  my  agreement 
with  the  people  in  Brooklyn,  it  is  to  soil  at  the  prices  established 
by  the  board  of  directors  of  the  Consolidated  Milk  Exchange.  I 
have  done  that  ever  since  it  was  organized;  that  is  the  way  we 
all  do  in  my  locality,  unless  they  sell  to  Borden.  I  understand 
that  all  of  the  producers  in  my  locality  that  I  know  of,  sell  to 
the  dealers  in  New  York  city  either  at  the  prices  established  by 
Bordens  or  at  the  prices  established  by  the  Consolidated  Milk 
Exchange.  We  make  our  agreements  the  first  of  April  and  the 
first  of  October.  It  is  not  any  benefit  to  me  now  to  be  a  member 
of  the  Consolidated  Milk  Exchange.  The  way  it  is  I  am  not 
any  particular  member.  I  have  to  hold  five  shares  to  be  a  direc- 
tor and  I  own  one  share,  and  I  have  to  send  my  proxy  in  and 
let  someone  else  vote  it.  There  are  not  many  farmers  that  have 
shares  in  the  exchange.  It  is  composed  mostly  of  dealers.  The 
farmers  have  sold  out.  I  do  not  know  the  cost  of  producing  a 
quart  of  milk  throughout  the  year.  I  don't  think  there  is  much 
profit  at  the  present  exchange  prices.  Yes,  I  know  that  the 
price  of  milk  was  raised  in  New  York  city  about  November  first 


No.  45.]  73 

from  8c.  to  9c.,  but  that  don't  affect  us  any  as  they  did  not  raise 
much  for  us.  I  think  they  did  raise  ^c.  They  raised  Jc.  on 
the  23d  of  November.  I  have  been  selling  to  this  concern  in 
Brooklyn  about  three  years.  Previous  to  that  I  sold  to  A.  Larson, 
Brooklyn.  I  learned  of  the  advance  in  price  on  the  2<3d  of 
November  from  the  country  papers.  I  have  not  received  my 
money  for  the  milk  since  the  raise  of  Jc.  I  knew  they  had  raised 
because  I  saw  it  in  the  paper.  I  did  not  receive  any  letter  or 
communication-  of  any  kind,  but  as  I  had  contracted  to  receive 
exchange  prices,  when  I  saw  it  in  the  local  paper,  I  knew  that  I 
would  be  entitled  to  |c.  advance.  Some  of  the  farmers  who 
bought  stock  are  George  Slaughter  and  Jim  Howell.  The  people 
at  the  creamery  bought  this  stock.  It  is  pretty  much  all  gathered 
in.  I  send  my  proxy  once  a  month  when  they  hold  meetings  to 
vote  my  stock. 

WILL  E.KAY: 

I  reside  at  Ilerkimer,  New  York.  I  think  my  farm  is  about 
224  miles  from  New  York.  I  have  operated  a  dairy  farm  all  my 
life  and  for  the  past  four  or  five  years  I  have  managed  two  farms. 
On  one  farm  I  produced  83,618  quarts  of  milk  at  a  cost  of  about 
.03553  per  quart.  I  figure  in  the  items  of  cost  of  lands  and  build- 
ings at  $12,000;  thirty-five  cows  and  five  horses,  $2,00-0;  imple- 
ments, tools,  etc.,  $1,000,  making  a  total  investment  of  $15,000. 
I  have  interest  of  five  per  cent  on  that,  $750.  Taxes,  $143.18. 
Repairs  to  buildings,. etc.,  $150.  Horseshoeing  and  incidentals, 
$83.00.  Feed  purchased,  $518.  Grass  and  other  seeds,  $44.  In- 
surance $11.40.  Making  a  total  of  $2,979.58.  Therefore  total 
cost  divided  by  the  number  of  quarts  makes  .035-5  plus.  I  sold  my 
milk  in  1909  to  the  Mutual  Milk  and  Cream  Company.  The  aver- 
age price  I  obtained  from  the  Mutual  Milk  and  Cream  Company 
in  1909  was,  in  January,  0371.  February,  .0371.  March,  .0329. 
April,  .0265.  May,  .0223.  June,  .0191.  July,  .0223.  August, 
.0224.  'September,  .0285.  October,  .0382.  November,  .0404. 
December,  .0414.  Our  price  was  governed  by  the  Michigan  Milk 
Condensing  Company  at  Frankfort.  I  am  unable  to  say  whether 
that  is  a  Borden's  concern  or  not.  I  can't  see  how  milk  under 
present  conditions  can  be  purchased  for  less  than  three  cents 


74  [SENATE 

for  six  months  and  four  cents  for  the  other.  I  wish  to  state  that 
the  average  price  I  received  per  quart  during  1909  is  .0284. 
There  is  no  doubt  but  what  I  received  less  in  1909  than  in  1908. 
I  do  not  know  of  any  reason  why  dealers  in  New  York  should 
raise  the  price  of  milk  to  the  consumers  in  190-9.  I  believe  there 
is  a  combination  to  buy  this  milk  just  as  cheap  as  they  can  and 
not  interfere  with  one  another  and  each  one  sell  it. 

BENJAMIN  F.  LIVINGSTON  : 

I  reside  at  Chemung,  N".  Y.,  Chemung  county,  about  265  miles 
from  New  York.  I  operate  my  farm  at  the  present  time  and 
have  been  in  the  farming  business  all  my  life.  I  operate  it  prin- 
cipally as  a  dairy  farm.  The  average  cost  of  producing  milk  in 
the  year  1909  on  my  farm  was  about  three  and  one-half  cents.  The 
items  going  to  make  up  that  three  and  one-half  cents  are  feed 
and  labor,  and  wear  and  tear  on  cattle.  I  didn't  figure  interest 
on  my  investment.  I  sell  my  milk  at  exchange  prices  to  the 
New  York  Dairy  Produce  Co.,  the  president  of  which,  John  B. 
Wierk,  is  a  member  of  the  Consolidated  Milk  Exchange.  I  have 
delivered  milk  to  them  for  ten  or  twelve  years  and  my  agree- 
ment has  generally  been  oral  —  New  York  Exchange  price ;  that 
is,  the  price  established  by  the  Consolidated  Milk  Exchange.  All 
of  the  other  producers  in-  my  vicinity  deliver  to  some  creamery. 
They  all  have  the  same  form  of  contract.  All  sold  on  the  ex- 
change basis  except  one  man.  There  is  another  creamery  within 
two  miles,  operated  by  Mr.  Ttoch.  He  is  a  dealer  in  Brooklyn. 
Milk  is  sold  to  him  at  the  exchange  price.  There  is  another 
one  in  my  vicinity  about  six  miles,  the  Newark  Milk  &  Cream 
Co.,  Mr.  Win.  H.  Bennett,  Milk  is  delivered  to  him  now  this 
winter  at  the  exchange  prices.  There  is1  another  creamery  at 
Lockwood  about  seven  miles  from  me.  Milk  is  delivered  to 
them  at  the  exchange  price.  I  do  not  know  of  any 
creamery  in  my  vicinity  sending  milk  to  New  York,  at  which 
the  exchange  price  does  not  prevail.  When  I  was  dissatisfied 
with  the  exchange  price,  I  went  down  to  Newark  and  made  a  deal 
with  a  dealer.  I  deal  in  milk  myself.  I  am  a  kind  of  a  shipper. 
Two  years  ago,  I  went  down  and  made  a  contract  in  Newark  for 
cream  that  I  realized  a  good  deal  more  out  of  my  milk.  I  made 


No.  45.]  75 

a  contract  with  an  independent  dealer  once  to  get  higher  than 
exchange  prices  for  milk  in  the  winter  time  about  three  years 
ago.  I  have  not  tried  to  make  any  contracts  within  three  years. 
I  thought  the  exchange  price  was  as  good  as  I  could  get  at  pres- 
ent. I  think  the  average  of  the  exchange  prices  for  1909  is  about 
three  and  one-third  cents.  About  the  same  for  1908.  Perhaps  a 
shade  higher  for  1908  than  for  1909.  I  do  not  think  I  am  ob- 
taining sufficient  for  my  milk.  I  ain't  making  a  living  out  of  it. 
I  don't  know  of  any  way  at  the  present  time  that  I  could  market 
my  milk  in  New  York  at  a  higher  price.  In  my  opinion,  the 
reason  the  farmer  cannot  get  more  than  cost  for  his  milk  when 
that  cost  is  three  and  one-half  cents  and  the  consumer  is  paying 
nine  cents,  is  because  the  market  is  made  by  the  New  York  Ex- 
change and  we  have  to  accept  that,  otherwise  quit  business.  I. 
think  there  are  two  farmers  in  the  exchange  out  of  eighty  mem- 
bers. I  am  not  a  member.  I  find  out  what  price  has  been  es- 
tablished by  the  Milk  Exchange  through  a  card  which  they  send 
me  every  month  every  time  the  price  changes.  That  card  is  sent 
by  the  "  Milk  Reporter."  I  subscribe  to  the  "  Milk  Reporter  " 
and  pay  twenty-five  cents  additional  for  this  postal  card  service. 
For  the  last  ten  years.  I  have  no  doubt  but  what  the  New  York 
Exchange  controls  the  situation  to  such  an  extent  that  they  can 
fix  most  any  price  that  they  please  and  the  farmer  has  to  take 
that  price.  I  don't  think  that  it  is  a  fair  proposition  for  a  num- 
ber of  dealers  to  get  together  to  fix  a  price  of  milk  to  the  pro- 
ducer when  their  interest  is  altogether  adverse  to  the  producer 
and  their  interest  is  to  buy  milk  as  cheaply  as  possible.  The 
Board  of  Directors  of  the  Consolidated  Milk  Exchange  claim  to 
me  that  they  fix  a  price  for  milk  on  the  supply  and  demand.  I 
don't  know  as  that  claim  is  justified  altogether.  I  was  talking 
with  Mr.  Wierk  some  time  in  the  fall  about  the  price  of  milk. 
He  said  that  he  could  not  live;  that  he  would  have  to  raise  the 
price.  He  said  they  could  not  make  any  money  at  eight  cents  a 
quart.  They  would  have  to  raise  it.  He  said  if  Borden  did, 
the  rest  of  them  would.  I  think  this  conversation  was  in  Sep- 
tember. He  said  the  majority  of  the  dealers  in  the  city  were 
going  to  see  what  Borden  did  and  if  Borden  raised  the  price, 
they  would  all  raise  the  price.  I  do  not  consider  the  Consolidated 


76  [SENATE 

Milk  Exchange  as  it  is  at  present  constituted,  beneficial  to  the 
producer.  I  think  they  take  advantage  in  establishing  prices. 
They  lower  the  price  sometimes  where  there  is  no  reason  for  it. 
In  the  summer  time,  we  don't  realize  anything  out  of  the  milk. 
Milk  is  always  worth  more  than  two  cents  a  quart  and  no  farmer 
can  make  milk  at  two  cents  a  quart.  In  March,  April  and  May, 
farmers  always  sell  their  milk  at  a  loss  and  in  June  it  just  about 
pays  enough  to  milk  the  cows.  I  .have  known  the  milk  to  be 
separated  and  reunited,  but  it  is  not  done  at  the  present  time.  It 
has  not  been  done  within  the  last  year.  The  milk  in  my  sec- 
tion does  not  run  a  great  deal  over  3  per  cent.,  as  we  have  mostly 
Holstein  bred  cows.  The  manager  of  the  New  York  Produce 
Co.  told  me  last  week  that  they  were  going  back  to  the  eight- 
cent  price  the  first  of  March.  He  said  that  all  were  going  back 
to  the  eight-cent  price. 

H.  LA  MOTT  LOCKE,  Farmer  and  Dealer: 

I  reside  near  Richfield  Springs,  Ostego  county,  about  260 
miles  from  New  York.  I  have  been  interested  in  farming  all 
my  life,  although  I  have  been  in  a  mercantile  business  for  fifteen 
years  and  have  als<»  been  a  retailer  of  milk  in  the  city  of  Chicago; 
owned  a  route  tin  re.  My  farm  is  operated  as  a  dairy  and  hop 
farm.  I  should  say  it  cost  three  and  one  quarter-cents  to  pro- 
duce a  quart  of  milk  during  1909.  At  the  present  time,  I  am 
making  butter  and  am  selling  the  butter  to  my  neighbor  farmers. 
The  items  entering  into  the  cost  of  the  production  are  the  cost  of 
the  business,  plant,  and  the  hay,  the  grain,  the  price  of  labor, 
tools  and  the  buildings,  that  is,  the  repairs  to  the  buildings.  If 
I  wanted  to  make  a  •  reasonably  fair  profit  on  my  milk  and  on 
the  investment  I  would  not  supply  milk  at  less  than  four  cents. 
I  hardly  think  I  would  at  that.  I  don't  think  the  profits  at  four 
cents  would  enable  him  to  receive  as  much  profit  on  the  amount 
invested  as  in  any  other  business  which  I  know  of.  There  are 
milk  stations  in  my  vicinity.  The  milk  all  goes  to  New  York 
at  exchange  price.  There  is  somewhere  between  twelve  or  fifteen 
of  these  stations  within  the  radius  of  fifteen  or  twenty  miles  of 
me ;  four  or  five  within  four  miles  of  me,  and  one  within  one  and 
one-quarter  miles,  where  I  carried.  All  the  milk  that  is  sent  to 


No.  45.]  77 

these  stations  is  sold  at  exchange  prices.  All  the  exchange  price 
that  we  get  or  know  anything  about  what  we  are  going  to  re- 
ceive, is  what  we  read  through  the  papers  and  the  sign  they  hang 
out  at  the  door  when  they  want  to  change  it.  This  condition 
exists.  The  farmer  takes  his  milk  to  the  station  and  we  get 
the  amount  posted  on  the  door  and  that  corresponds  with  the  price 
that  is  established  by  the  board  of  directors  of  the  Consolidated 
Milk  Exchange.  Most  all  the  papers  print  the  exchange  price. 
1  take  eight  or  ten  different  papers.  We  never  get  any  more  than 
that  price.  Howard  Barton  &  Company  operate  the  station  where 
I  carried  last.  Borden  has  no  stations  anywhere  near  me.  It 
is  supposed  by  the  farmers  in  my  locality  that  a  combination  exists 
among  the  dealers  of  New  York  city  to  fix  or  control  the  price 
paid  to  the  producer  for  milk.  They  base  that  supposition  on 
the  fact  that  they  are  run  by  different  parties  and  all  make  the 
change  at  the  same  time.  As  near  as  we  know  of,  there  are 
fifteen  stations  all  run  by  different  parties  and  all  make  the 
change  at  the  same  time.  The  stations  are  all  owned  by  New 
York  parties.  I  have  understood  that  up  to  two  years  ago,  the 
farmers  who  carried  to  the  Bordens  were  getting  a  better  price 
than  those  who  got  the  exchange  price,  but  for  the  past  two  years, 
it  is  a  supposition  among  the  farmers  that  they  have  co-operated 
together  and  are  keeping  about  even  up.  It  is  a  fact  that  their 
prices  will  about  average.  It  is  my  supposition  that  a  combina- 
tion exists  among  the  dealers  of  ]STew  York  city  to  advance  the 
price  of  milk  one  cent  a  bottle  on  November  1,  1909,  to  the 
consumer.  I  took  my  supposition  from  the  fact  that  they  raised 
it  without  any  just  cause,  that  we  can  see.  It  is  not  an  accurate 
statement  that  the  dealers  raised  this  price  'because  they  had  to 
pay  the  farmer  an  additional  amount,  for  it  is  not.  I  never  heard 
of  any  of  the  producers  that  got  anything  out  of  that  one  cent 
raise.  When  it  costs  a  farmer  three  and  one-quarter  cents  to 
produce  a  quart  of  milk  and  the  middleman  obtains  five  and  two- 
thirds  at  the  present  price  of  milk  for  transporting  that  milk 
from  th'e  producers  to  the  consumers,  I  should  think  they  were 
making  an  exorbitant  price.  The  difference  between  what  they 
pay  and  what  they  are  getting  for  it,  I  should  think,  was  arbi- 
trary. I  regard  the  existence  of  the  Consolidated  Milk  Exchange 


78  [SENATE 

as  detrimental,  because  they  are  virtually  forcing  the  farmer 
under  the  present  conditions,  as  he  has  no  other  place  to  carry  his 
milk,  thereby  compelling  him  to  take  less  than  the  amount  he  can 
afford  for  his  milk.  There  is  no  other  place  to  market  it  that 
I  know  of.  It  is  a  supposition  with  all  farmers  that  it  would 
be  impossible  to  market  our  milk  through  independent  dealers. 
I  think  the  only  remedy  is  to  erect  co-operative  creameries.  I 
never  knew  that  a  separator  cleansed  milk  in  any  way  until  to- 
day. I  have  one  —  one  of  the  best  in  the  market  —  and  I  don't 
see  that  it  cleanses  it  in  any  way.  The  only  use  I  can  see  for  a 
separator  is  to  separate  the  milk  from  the  cream.  I  have  been 
in  Borden's  stations  where  I  have  carried.  Previous  to  two  years 
ago,  they  used  the  separator  in  order  to  get  the  amount  of  cream 
that  they  wanted.  Then  they  took  the  can  of  whole  milk  about 
three-fourths  full,  and  then  filled  it  up  with  skim  milk  in  orden 
to  get  the  test  which  you  speak  of,  that  is,  3  per  cent,  butter 
fat.  That  practice  is  prevalent  in  the  creameries  in  all  stations 
that  I  have  reference  to  and  I  have  talked  with  most  of  them. 
I  have  been  in  most  of  them  and  that  is  the  way  milk  is  handled. 
They  seek  not  to  give  the  natural  product  to  the  consumers  in 
New  York  city,  but  simply  to  give  milk  that  will  run  3  per  cent, 
butter  fact  in  order  to  comply  with  the  law.  One  station  near  me 
was  taken  up  under  this  law,  which  you  speak  of  and  had  to  pay 
pretty  smart  money  for  it.  My  impression  is  that  the  freight 
rates  charged  by  the  railroad  companies  are  too  high.  I  think 
that  the  railroads  obtain  more  on  their  milk  business  than  for 
any  other  class  of  freight  for  a  similar  amount  of  work.  The 
railroads  are  anxious  to  do  this  milk  business.  They  encourage 
the  opening  of  stations  along  the  line  of  the  railroad.  The  sta- 
tions are  built  through  the  express  companies  —  all  those  that 
I  speak  of.  I  have  quite  an  experience  in  regard  to  that.  The 
man  that  first  opened  the  station  failed  and  beat  the  farmers  out 
of  about  $1,000.  I  know  I  was  about  $70  out  and  I  went  out 
around  among  the  patrons  of  that  station,  and  I  said  to  them, 
"  When  they  want  to  open  this  station  again,  let's  make  the  par- 
ties who  wrant  to  open  it,  secure  it."  Mr.  Westcott  was  there 
himself,  and  all  the  farmers  agreed  that  we  would  do  that  and 
.they  put  me  in  as  spokesman,  and  I  said  to  him,  "  We  don't  know 


No.  45.]  79 

these  parties  which  you  brought  up  here  to  open  the  station,  but 
we  know  the  station  belongs  to  you,  and  what  security  have  we 
people  got  ?  We  will  bring  our  milk  here  if  you  will  secure  us." 
He  wouldn't  do  it,  but  he  says,  "  We  have  sold  this  station,"  I 
says,  "How  do  we  know  that?  We  know  you  built  it."  He 
says,  u  You  can  tell  by  going  to  the  county  clerk's  office."  That 
was  in  Herkimer  county;  I  lived  in  Otsego,  just  below  the^line 
and  he  says,  "  This  property  is  security."  Well,  that  queered 
the  whole  business.  They  all  said  they  would  bring  the  milk. 
"  That  is  security  enough."  Well,  I  didn't  think  it  was  true, 
so  I  went  to  the  county  clerk's  office  and  I  found  that  that  was 
all  a  farce;  they  still  owned.it.  The  express  company  still  owned 
the  station.  That  was  Mr.  Westcott.  I  think  he  was  president 
of  the  Westcott  Express  Company.  It  is  my  impression  he  was 
the  same  Westcott  that  founded  the  Mutual  Milk  &  Cream  Com- 
pany. Westcott  was  representing  the  Richfield  Springs  branch 
of  the  D.  L.  &  W.  It  is  my  impression  and  the  farmers'  all 
along  the  line,  that  Westcott  built  all  on  that  line.  There  is  a 
shortage  of  milk  in  my  vicinity  at  the  present  time.  The  advance 
in  price  in  New  York  to  the  consumer  might  account  for  the  flush 
of  milk  in  New  York.  In  the  city  of  Chicago,  it  cost  me  about 
one  and  one-half  cents  a  quart  to  deliver  milk.  I  had  a  small 
route  and  went  over  a  large  territory.  I  consider  that  if  you 
supply  customers  from  house  to  house  it  can  be  done  for  about 
one  and  one^half  cents  a  quart.  One  man  with  a  horse  and  wagon 
can  deliver  about  eight  to  ten  cans,  about  four  hundred  quarts. 
I  was  selling  dip  milk.  Any  one  that  was  dissatisfied  with  the 
exchange  or  the  Borden  prices,  might  have  taken  to  the  cheese 
factories,  as  some  of  the  farmers  did  a  great  deal  better  there 
than  the  exchange  price.  The  farmer  should  receive  one  cent  a 
quart  more  in  the  winter  than  he  does  in  the  summer.  There  is 
just  one  point  I  wish  to  speak  of  and  that  is,  it  came  up  here 
about  keeping  the  milk  a  long  time.  Now,  I  had  a  little  experi- 
ence that  comes  to  me,  if  the  fellow  told  the  truth.  I  had  a  friend 
who  was  a  cheese  maker  and  he  asked  me  to  test  some  milk  he  had 
in  his  room.  Knowing  that  I  knew  something  about  milk,  he 
asked  me  if  that  was  not  fresh  milk  and  sweet.  I  tasted  it  and 
it  was  sweet.  He  said  "  That  milk  was  put  up  the  4th  day  of 


80  [SENATE 

July/'  and  this  was  along  in  the  middle  of  December.  I  asked 
him  how  he  did  it.  He  said,  "  I  was  sure  that  the  milk  was 
perfectly  clean  and  sweet,  and  I  got  the  animal  heat  out  of  It 
as  soon  as  possible  and  I  put  up  one-half  a  dozen  cans  in  common 
fruit  cans.  I  had  it  ice  cold  when  it  was  put  there  and  I  sub- 
merged that  in  ice  cold  water  so  the  air  couldn't  get  to  it  and 
it  has  remained  in  that  position  from  then  until  the  present  time," 
and  that  milk  wTas  certainly  sweet.  The  conditions  in  my  country 
are  that  you  must  either  carry  to  the  milk  factory  or  to  the  milk 
station.  They  won't  take  you  back  and  forth  as  we  have  had  con- 
siderable trouble  over  this.  Farmers,  of  course,  want  to  get  all 
they  can  out  of  milk  but  when  the  cheese  factory  is  paying  better 
prices  than  the  exchange  prices  they  would  fall  off  and  carry  to 
the  factory  and  vice  versa.  I  had  a  talk  with  one  of  my  neigh- 
bors this  summer.  She  said  the  milk  factory  was  paying  about 
forty  cents  to  fifty  cents  more.  I  asked  her  why  she  did  not 
change.  She  said  she  dare  not  change  because  the  factory  will 
close  and  then  she  would  not  have  any  place  for  her  winter  milk. 
She  did  not  want  to  go  down  on  her  knees  and  ask  them  to  take 
her  back  after  Ic-aving.  Those  are  the  conditions  that  confront 
us  in  that  respect.  We  can  change  from  one  milk  station  to  the 
other  and  they  take  us  back. 

WILLIAM  A.  MATHER: 

I  am  a  farmer  with  a  farm  about  170  miles  from  Albany. 
I  have  always  been  a  farmer.  I  know  nothing  about  the 
cost  of  producing  milk  but  think  that  the  average  farmer 
who  has  produced  milk  as  his  main  product  is  losing 
money.  During  five  months  last  winter  I  sold  my  milk  to 
the  Rosemary  Creamery  at  Adams.  The  price  that  the  creamery 
was  to  pay  me  and  to  which  I  agreed  was  one-quarter  cent  below 
the  exchange  price ;  the  reason  for  the  deviation  from  the  exchange 
price  was  that  this  creamery  is  very  anxious  to  get  as  much  as 
possible  and  it  bothers  them  sometimes  and  last  winter  they  were 
paying  quite  a  bit  better  than  the  prices  we  could  get  for  butter 
and  cheese  manufactured ;  and  for  that  reason  the  farmers  wanted 
to  take  advantage  of  that  increase  in  price,  and  so  the  Rosemary 
people  agreed  to  take  them  in  at  a  quarter  under,  and  we  were  glad 


No.  45.]  81 

to  do  it.  From  what  I  have  read  I  should  expect  there  is  a  com- 
bination among  the  dealers  in  this  city  to  fix  or  control  the  price. 
I  have  no. accurate  information  as  to  the  raise  of  price  on  Novem- 
ber 1,  1909.  I  know  that  a  separator  is  used  altogether  in  my 
locality,  but  I  do  not  know  why  they  do  it.  I  think  and  feel  that 
the  farmers  who  appear  in  this  investigation  and  swear  that  they 
can  make  milk  for  three  to  three  and  one-third  cents  a  quart  when 
they  don't  know,  are  doing  themselves  and  the  milk  producers  in 
this  State  in  general  a  great  injury,  because  the  milk  buyers  in 
New  York  naturally  won't  feel  any  too  good-natured  toward  a 
farmer  who  tells  things  that  they  do  not  wish  to  be  told,  and  if 
there  ever  comes  a  chance  that  they  can  use  that  testimony  to  beat 
the  price  of  milk  down,  they  are  going  to  do  it.  I  do  not  think 
that  milk  can  be  produced  for  three  cents  a  quart  with  any  profit. 
I  think  that  it  is  important  that  the  farmers  should  establish  co- 
operative creameries  for  their  own  protection.  As  an  example 
right  in  Adams  they  put  up  a  co-operative  creamery  at  the  cost  of 
$8,000,  within  200  feet  of  the  Rosemary  creamery  and  the  third 
year  the  Rosemary  creamery  stopped  and  has  been  closed  ever 
since,  and  every  year  except  one  we  have  received  more  money  than 
the  Rosemary  people  paid  us.  I  certainly  think  that  the  farmer 
should  have  something  to  say  about  the  price  which  he  will  get 
for  his  product. 

ALBERT  J.  MOE: 

I  reside  in  the  town  of  Burk,  Franklin  county,  about  270  miles 
from  Albany.  I  am  engaged  principally  as  a  farmer.  I  keep 
about  twelve  cows.  I  do  not  know  how  much  it  costs  me  to  pro- 
duce milk.  I  have  no  idea  how  many  quarts  I  produce.  I  have 
been  sending  my  milk  to  a  co-operative  creamery  where  they  make 
butter  and  cheese  for  a  number  of  years  located  in  the  town  of 
Burk.  There  is  a  shipping  station  in  our  town.  It  is  that  of  the 
Sheffield  Farms.  The  following  prices  were  paid  by  Sheffield 
Farms  at  that  station:  January,  1909,  $1.75  a  hundred;  Febru- 
ary, $1.75;  March,  $1.55;  April,  $1.20;  May,  $1.05;  June,  $1 ; 
July,  $1.25 ;  August,  $1.35 ;  September,  $1.35 ;  October,  $1.75 ; 
November,  $1.80;  December,  $1.90;  and  the  present  month  they 
are  paying  $1.90.  I  understand  that  these  prices  are  a  little  over 
Borden's  price,  but  some  months  we  beat  the  co-operative  price 


82  [SENATE 

and  other  months  they  beat  us.  This  milk  shipping  in  our  county 
is  a  new  thing.  It  has  only  been  in  existence  a  little  over  a  year. 
Only  five  stations,  and  one  or  two  of  them  just  started  this  winter, 
and  there  is  only  a  very  little  milk  shipped  from  our  town.  The 
people  prefer  the  factories;  that  is,  having  the  milk  worked  up 
into  butter  and  cheese  rather  than  to  sell  to  the  stations.  I  know 
nothing  of  the  operations  of  the  Consolidated  Milk  Exchange. 

CHAKLES  F.  MOULTEN: 

I  reside  in  Cuba,  Allegany  county,  and  have  been  a  farmer  for 
about  fifty  years.  My  farm  is  operated  almost  exclusively  as  a 
dairy  farm,  and  during  the  year  1909  I  produced  90,000  quarts  of 
milk,  which  cost  to  produce  $2,890.  The  items  entered  into  the 
cost  of  production  are :  interest  on  the  investment,  help,  wear  and 
tear  of  tools,  taxes,  rent  and  feed.  The  amount  of  interest  on  the 
investment  was  5  per  cent,  on  $12,000  or  $600 ;  help,  $1,440 ;  wear 
and  tear,  $200;  taxes  and  rent,  $150;  feed,  $500;  latter  not  being 
total  amount  of  feed  but  only  that  purchased  outside;  the  help  that 
I  employed  on  the  farm  produces  the  balance  of  the  feed  taken  in 
connection  with  the  farm,  making  a  total  of  $2,890,  making  the 
average  cost  of  production  of  a  quart  of  milk  during  the  year 
1909  three  and  two-tenths  cents.  I  think  if  T  received  three  and 
seven-tenths  cents  per  quart  I  would  be  making  a  reasonable  re- 
turn on  my  investment.  If  I  eliminated  the  5  per  cent,  which  I 
allowed  on  my  investment,  I  think  in  order  to  make  a  reasonable 
profit  and  to  cover  that  item  and  profit  besides,  I  would  have  t<> 
sell  milk  at  four  cents.  I  retail  the  most  of  my  milk  around  town, 
but  have,  until  recently,  sold  my  surplus  to  the  Ilowell  Condensed 
Milk  Co.  of  Xow  Jersey.  I  had  no  written  contract,  but  they 
agreed  verbally  to  pay  the  price  that  would  be  put  out  on  the 
board.  I  get  my  knowledge  of  the  exchange  prices  from  the 
"  Orange  County  Farmer,"  a  paper  published  down  in  Xew  York. 
I  have  compared  the  prices  quoted  as  exchange  prices  in  the 
"  Orange  County  Farmer,"  with  the  prices  which  I  received  from 
the  Ilowell  people  and  they  were  not  always  the  same.  Mr. 
Knapp,  who  represented  the  Ilowell  people,  told  me  that  they 
would  follow  the  exchange  price.  So  far  as  I  know,  all  shipments 
from  the  creameries  in  my  county  are  made  to  Xew  York,  and  it 
was  a  general  understanding  that  our  creameries  would  pay  pro- 


No.  45.]  83 

ducers  the  prices  fixed  by  the  Consolidated  Milk  Exchange. 
Howell  Bros,  are  shipping  about  one  hundred  cans,  which  is  a  third 
what  they  were  shipping  last  year,  due  to  the  competition  of  the 
cheese  factories.  During  the  year  1909,  I  obtained  the  following 
prices  for  a  40-quart  can:  January,  $1.70;  February,  $1.53  and 
$1.41 ;  March,  $1.41 ;  April,  $1.23  and  $1.17  ;  May,  $1 ;  June,  $1 ; 
July,  $1;  August,  $1.25  and  $1.40;  September,  $1.50;  October, 
$1.50 ;  November,  $1.75 ;  December,  $1.75.  The  reason  that  I  am 
led  to  believe  that  there  exists  a  combination  among  milk  dealers  in 
New.  York  city  to  fix  and  control  the  price  of  milk  paid  by  them  to 
producers,  is  the  fact  that  I  had  dealings  with  a  milk  dealer  in  New 
York.  His  name  was  Knapp.  I  think  he  lived  in  Goshen  about 
three  years  ago.  The  only  other  reason  is  the  fact  that  the  price  of 
milk  has  been  arbitrarily  raised  at  times  when  there  were  no  nat- 
ural causes  that  would  warrant  such  raise,  or  depreciate  it,  either 
way.  That  would  seem  to  me  to  indicate  that  there  was.  I 
mean  that  the  price  to  the  producer  has  been  arbitrarily  fixed.  I 
believe  that  there  is  a  combination  which  raised  the  price  from 
eight  to  nine  cents  about  November  1,  1909,  because  they  pay  us 
in  the  neighborhood  of  three  cents  or  a  little  better  and  sell  at  nine 
cents,  therefore  it  would  seem  there  was  an  understanding.  I 
should  judge  that  this  milk  exchange  \vould  be  detrimental  from 
the  fact  that  any  combination  that  will  arbitrarily  fix  the  price  of 
any  product  is  detrimental,  shutting  out  competition.  In  my  re- 
tailing business  I  find  that  it  costs  about  two  cents  a  quart  to  de- 
liver milk  in  my  own  town.  When  I  sell  milk  at  six  cents  a  quart  in 
my  town,  I  realize  a  profit,  as  the  production  and  delivery  is  about 
five  and  two-tenths  cents  per  quart.  There  is  strong  competition 
here  between  cheese  factories  and  the  milk  dealers.  The  farmers 
in  this  section  consider  a  dollar  at  the  factory  as  good  as  $1.20  de- 
livered at  the  station.  The  twenty  cents  difference  is  due  to  the 
ten  cents  charge  to  deliver  to  the  station  and  the  ten  cents  which 
we  consider  whey  worth.  In  April,  the  average  price  was  $1.38 
per  hundred  pounds;  May,  $1.09;  June,  $1.15;  July,  $1.18; 
August,  $1.32;  September,  $1.41;  October  $1.60;  November, 
$1.56;  December,  $1.66,  being  the  twenty  cents,  which  is  a  better 
price  than  the  exchange.  There  is  no  condition  that  I  know  of 
that  would  entitle  the  dealer  to  charge  the  consumer  nine  cents 


84  [SENATE 

instead  of  eight  cents  in  New  York  city.  The  statement  that  the 
milk  dealers  had  to  pay  the  farmer  a  higher  price  and  therefore 
must  increase  the  price  from  eight  to  nine  cents  a  quart  for  a  bottle 
of  milk  in  New  York  city,  is  not  based  on  fact  and  my  information 
in  regard  to  the  truth  of  that  statement  is  all  to  the  contrary.  I 
think  the  price  of  cheese  was  about  six  or  seven  cents  a  pound  ten 
or  fifteen  years  ago,  and  it  is  about  fifteen  or  sixteen  cents  now, 
that  is,  the  price  that  the  farmer  gets'for  it.  It  takes  between  four 
and  five  quarts  of  milk  to  make  a  pound  of  cheese.  At  certain 
times  of  the  year  it  takes  nine  to  eleven  pounds  of  milk  to  make*  a 
pound  of  cheese.  It  is  true  that  prior  to  the  organization  of  the 
Consolidated  Milk  Exchange  the  farmers  lost  large  sums  of 
money  by  reason  of  their  dealing  with  irresponsible  men  and  their 
inability  to  find  a  dealer  in  .New  York  that  was  responsible.  I 
have  observed  that  there  is  a  relation  between  the  rise  and  fall  in 
milk  in  the  butter  and  cheese  prices  and  the  rise  and  fall  in  milk. 
The  prices  that  I  quoted  on  cheese  are  for  full  cream  cheese. 

ANDREW  J.  NICOLL: 

I  reside  at  Delhi,  Delaware  county,  New  York,  and  am  engaged 
as  a  dairyman  and  have  been  for  twenty  years.  It  is  operated 
exclusively  as  a  dairy  farm.  I  produced  about  80,000  quarts 
of  milk  in  the  year  1909.  I  had  at  different  times  thirty-seven 
cows.  We  calculate  to  milk  not  less  than  twenty-live  cows  at 
a  time.  "My  farm  is  about  two  hundred  miles  from  New  Yrork. 
The  total  cost  of  producing  the  80.000  quarts  in  1001)  was  approx- 
imately $2.400.  I  figured  in  as  items  of  cost,  feid,  labor,  inter- 
est, taxes  and  depreciation  as  follows:  $1,100  for  feed;  $700  for 
labor;  $500  for  interest  on  investment,  taxes  and  insurance:  and 
$100,  depreciation.  I  have  not  considered  the  value  of  my 
services  nor  that  of  my  wife's,  who  helps  on  the  farm.  I  con- 
sider the  cost  of  producing  a  quart  about  3  cents.  That  was 
leaving  out  the  value  of  our  services,  I  should  say  that  the  pro- 
ducer would  realize  a  fair  profit  if  he  got  4  cents  a  quart  for 
his  milk.  I  retail  my  milk  in  the  towrn.  The  Delhi  Co-operative 
Dairy  Company,  the  Borden  Condensed  Milk  Company  and  the 
Sanford  Creamery,  the  latter  of  which  is  idle,  are  in  my  vicin- 
ity. Leaving  out  of  the  question  the  premium  that  Bordens  pay 
for  milk  that  has  an  excess  of  butter  fat  in  it,  they  pay  the  usual 


No.  45.]  85 

Bordens  prices.  The  Cooperative  Creamery  make  their  milk 
largely  into  butter  and  ship  it  to  Philadelphia.  It  is  paid  for 
on  the  price  that  they  receive  for  the  product  of  butter,  cream, 
milk,  casein  and  milk  sugar.  For  the  year  1907  they  received 
10,915,995  quarts  and  paid  an  average  of  3.45  cents  a  quart.  In 
the  year  190$  they  received  S,9'6S,480  quarts  and  paid  an  aver- 
age of  3.3  cents  per  quart.  In  1909  they  received  10,336,403' 
quarts  and  paid  at  the  rate  of  3.0  cents  per  quart.  That  was 
the  Delhi  Co-operative  Dairy  Company.  When  the  Sanford 
Creamery  was  in  operation,  he  bought,  I  think,  on  the  Exchange 
prices.  The  farmers  established  this  Delhi  Co-operative  Dairy 
Company  for  the  purpose  of  competing  with  the  others.  They 
thought  the  price  would  be  better  than  Bordens  were  paying. 
Bord-ens  have  now  about  met  that  price.  I  cannot  say  whether 
the  Bordens  pay  the  additional  premium  because  the  Delhi  Co- 
operative. Creamery  is  in  existence.  They  pay  the  same  price  at 
Bloomville,  Hamden  and  Walton  that  they  do  at  Delhi.  I  under- 
stand that  Sanford  is  a  member  of  the  Consolidated  Milk  Ex- 
change. The  only  reason  that  I  am  led  to  believe  that  there  is  a 
combination  among  the  dealers  in  New  York  city  to  fix  the  price 
paid  to  producers  is  that  they  appear  to  be  driving  out  the  compe- 
tition in  the  country.  It  would  be  my  opinion  that  the  raise  of 
price  from  8  cents  to  9  cents  on  November  1,  1909,  was  the  result 
of  concurrent  action  by  the  various  milk  dealers.  In  my  own 
town  it  would  cost  about  two  cents  a  quart  to  deliver  milk.  I 
don't  know  how  much  it  would  cost  in  New  York  city. 

EDWARD  K.  PAEKINSOX  : 

I  reside  in  Albany  and  have  been  a  farmer  with  a  farm  in 
Pennsylvania,  sixteen  miles  from  Philadelphia.  I  have  not  been 
on  the  farm  for  several  years.  I  am  a  consulting  agriculturist. 
I  studied  at  Amherst,  Massachusetts,  Agricultural  College.  I 
have  had  five  years  of  farming  and  was  one  of  the  editors  of  the 
"  Country  Gentleman  "  for  two  years.  The  figures  that  I  have 
cover  every  cost  which  would  go  into  any  business  of  manufac- 
turing milk.  They  include  the  capital  invested,  the  taxeis,  depre- 
ciation, value  of  cows,  taxes  on  cows,  depreciation  of  cows,  value 
of  tools,  and  everything  thai  enters  into  the  cost  of  milk  and  all 


86  [-SENATE 

details,  salt,  soap  and  everything.  These  figures  will  show  the 
cost  of  milk  from  6,000  pounds  per  year  up  to  8,000.  To  begin 
with  6,000  pounds,  it  amounts  to  5.28  cents  a  quart  to  produce 
milk;  6,500  is  the  average  which  farmers  produce  throughout  a 
year  per  cow.  The  average  farmers  produce  eight  quarts  a  day 
the  year  round  per  cow.  It  costs  4.79  cents  per  quart  to  produce 
milk  in  a  farm  in  a  decent  business-like  way,  with  sanitary  stables 
and  good  pure  milk.  If  you  get  lip  to  9,000  pounds,  that  is 
higher  milk  production.  You  get  milk  cheaper.  You  get  down 
to  about  three  and  a  half  cents.  On  takir-^  eight  quarts  a  day 
as  an  average  per  year  throughout  the  country,  it  costs  5.2$  cents 
a  quart  to  produce  that  milk  at  the  present  price  of  grain.  My 
figures  are  based  on  a  twenty-cow  dairy  per  cow  share.  A  build- 
ing for  a  twenty-cow  dairy  costs  you  $1,500  which  is  a  very  mod- 
erate cost  for  a  building  which  includes  the  storing  of  the  food. 
Per  cow  share  is  $75.  The  interest,  taxes,  depreciation,  repairs 
and  insurance  avp  estimated  at  10  per  cent,  which  is  a  fair  value, 
that  is  $7.50  per  year  for  that  cow.  The  value  of  a  cow  is  given 
at  $75.  Cannot  get  a  good  cow  for  less.  Interest  and  taxes  on 
a  cow  at  (i  per  cent,  amount  to  $4.50  a  year.  There  is  a  depre- 
ciation of  20'  per  cent.  Cow's  life  in  a  dairy  is  about  four  to 
six  years.  At  the  end  of  tnat  time  they  bring  about  $15  a  piece. 
The  value  of  grainery  tools  per  cow  is  80  cents,  and  the  interest 
and  depreciation  on  that,  15  per  cent.,  is  12  cents  which  should 
be  added.  I  have  now  the  value  of  barn  tools  per  cow,  $2.28. 
This  is  farm  scales,  shovels,  fork,  trucks  for  grain,  manure, 
etc.,  and1  the  intenst  and  depreciation  on  this  sum  at  15  per  cent, 
is  34  cents.  The  value  of  the  dairy  implements  per  cow  is  $3.25. 
This  includes  milk  scales,  pails,  Babcock  tester,  strainer,  hot- 
water  heater,  cleaning  brushes,  etc.  Interest  and  depreciation  at 
15  per  cent,  amount  to  50  cents.  The  value  of  perishable  tools, 
such  as  currying  brushes,  recording  sheets,  soap,  salt,  ice,  bedding 
and  everything  amounts  to  $11.^(5.  The  value  of  food  consumed 
for  the  cow.  forty  pounds  of  ensilage  daily,  $4.50  a  ton.  While 
that,  might  be  a  little  too  much,  personally  I  could  figure  down 
to  $3.50  a  ton,  depending  on  the  kind  of  land.  That  amounts 
to  $20.16.  Twelve  pounds  of  hay  daily  for  224  days  at  $17  a 
ton  is  $2'2.55.  Eight  pounds  of  grain  for  224  days  at  $32  a  ton, 


No.  45.]  87 

$28.07,  making  a  total  for  food,  $71.68.  The  twenty  weeks  of 
pasture  at  30  cents  a  week,  I  think  that  is  a  fair  estimate, 
amounts  to  a  total  of  $20.93,  making  a  total,  including  the  labor 
for  handling  and  milking  one  cow,  $30,  cost  of  milk,  $162.43. 
Credit  against  that,  manure,  $20,  one  calf  a  year  valued  at  $2, 
making  a  total  cost  of  $140.43  for  milk.  The  figures  handed  in 
by  Mr.  Parkinson  show  as  follows,  running  under  the  above 
schedule  of  costs  for.  6,000  pounds  of  milk: 

6,220  pounds  of  milk  can  be  produced  at  $4.79 ; 
7,000'  pounds  of  milk  can  be  produced  at  $4.53 ; 
7,500  pounds  of  milk  can  be  produced  at  $4.22 ; 
8,000  pounds'  of  milk  can  be  produced  at  $3.96. 

I  have  obtained  these  figures  from  different  farmers,  asking 
them  the  cost  of  building,  grain,  etc.,  and  have  consul  ted  the  sta- 
tistics of  agricultural  colleges.  Grain  has  gone  up  more  than  25 
per  cent,  in  the  last  ten  years.  I  think  the  price  of  milk  is  arbi- 
trary as  far  as  I  can  make  out  from  seeing  here.  If  you  go  down 
to  the  "  Country  Gentleman's  "  office  and  look  over  the  records 
of  the  association  for  the  last  ten  years,  you  will  find  that  it  varies 
very  little,  almost  nothing  at  all.  For  six  months1  it  is  that  price 
and  six  months  it  is  the  other  price.  Pasture  milk  is  supposed  to 
be  cheaper,  as  in  the  winter  they  raise  it  on  account  of  the  cows 
having  to  be  fed.  I  do  not  know,  but  I  think  the  prices1  between 
the  Exchange  and  Bordens  run  about  the  same.  I  think  they 
practically  mean  to  have  them  about  as  near  together  as  possible. 

JOHN  S.  PETTEYS: 

I  reside  at  Greenwich,  Washington  county,  New  York.  Have 
been  a  farmer  practically  all  my  life.  I  am  situated  about  one 
hundred  and  eighty-six  miles  from  New  York.  In  1908  I  pro- 
duce about  seventy  thousand  pounds  of  milk,  about  thirty-five 
thousand  quarts.  Average  about  thirteen  or  fourteen  cows.  I 
would  think  it  cost  about  three  or  three  and  one-half  cents  to 
produce  a  quart  of  milk  during  the  year  190'9  or;  1908.  I  think 
the  farmer  ought  to  get  about  three  and  on-half  or  four  cents  in 
order  to  realize  a  fair  profit.  I  sold  my  milk  to  Daniel  Whiting 
&  Sons  of  Boston  during  the  past  year.  I  had  no  agreement 


88  [SEX ATE 

with,  them  and  I  sold  at  either  exchange  or  Borden's  prices,  but 
approximately  the  exchange  price.  They  usually  gave  out  a  state- 
ment of  the  prices  about  fifteen  days  before  the  ensuing  month. 
I  get  my  knowledge  of  the  consolidated  prices  from  the  agricul- 
tural papers.  I  have  never  sold  milk  to  any  one  who  shipped 
milk  to  'New  York.  I  know  nothing  about  the  Consolidated  Milk 
Exchange.  Last  September  I  was  a  juror  on  a  case  against  the 
Montgomery  Creamery  Company.  They  were  charged  with  sepa- 
rating milk  and  shipping  skimmed  milk  to  New  York,  sixty-eight 
cans  I  think,  and  sold  it  as  whole  milk.  That  happened  some 
years  previous  to  this  time.  We  brought  in  a  verdict  of  $6,000 
against  Montgomery.  Trial  was  held  at  Salem,  Washington 
county.  The  milk  was  separated  with  a  separator.  As  I  under- 
stand it,  they  skimmed  a  certain  portion  of  the  milk  and  then 
saved  the  cream  and  mixed  the  skim  milk  with  some  whole  milk 
that  they  had.  I  understand  this  skimming  of  milk  had  taken 
place  two  or  three  years  previous  to  the  trial. 

WILLIAM  P.  RICHARDSON: 

I  reside  at  Goshen  and  have  been  a  farmer  for  about  thirty 
years.  I  was  presidential  elector  in  1888  and  State  Senator  in 
1890.  I  remember  the  Milk  Exchange  Limited  and  had  deal- 
ings with  it.  From  my  dealings  with  the  Milk  Exchange 
Limited,  I  would  say  the  nature  of  the  business  that  they  carried 
on  at  that  time,  was  as  follows:  I  attended  one  meeting  I  re- 
member quiet  distinctly.  I  was  president  of  the  Farmers'  Or- 
ganization of  Orange  county  and  we  were  endeavoring  to  get  a 
better  price  for  milk.  Finally  I  was  delegated  to  meet  with  the 
Milk  Exchange  and  see  what  could  be  done,  which  I  did;  pre- 
sented our  side  of  the  case  to  them,  cost  of  feed,  etc.  They  did 
not  sympathize  much  with  my  suggestion.  Finally  concluded 
that  they  would  take  it  up  in  executive  session.  I  had  not  been 
out  of  the  room  five  minutes  before  they  made  the  price  for  the 
next  month  —  exactly  what  we  didn't  want.  When  we  made 
this  effort  to  obtain  this  price,  as  I  stated,  I  was  delegated  to  at- 
tend the  meeting.  They  decided,  so  I  have  understood,  unan- 
imously not  to  make  the  price  we  had  asked  for.  The  result 
was  the  calling  of  a  meeting  at  the  courthouse  in  Goshen,  a  mass 


]\To.  45.]  89 

meeting  of  the  farms,  at  which  meeting  it  was  decided  that  un- 
less we  could  obtain  the  price  that  we  felt  we  were  entitled  to, 
to  stop  our  milk,  which  we  did.  It  was  such  a  serious  stoppage 
that  the  next  morning  the  president  of  the  Milk  Exchange  came 
to  Goshen  to  see  me  and  asked  me  if  I  would  be  kind  enough  to 
name  a  committee  to  meet  with  the  Exchange  Limited.  It  was 
called  "  Limited  "  in  those  days ;  it  has  been  unlimited  ever  since. 
At  that  meeting  we  were  in  session  all  day.  We  finally  agreed 
upon  a  set  of  prices  for  the  year  which  aggregated  forty  for  the 
year;  the  prices  agreed  upon  at  this  conference  were  maintained 
for  about  a  year  and  a  half.  They  went  through  the  first  year 
all  right,  they  recognized,  and  milk  was  bought  and  sold  upon 
our  agreement.  The  next  year  they  formed  what  was  called 
a  joint  price  committee  and  I  was  made  chairman  of  that  com- 
mittee and  the  price  was  made,  but  during  the  second  year  the 
dealers  sent  back  so  far  into  the  country  for  milk  that  they  over- 
whelmed us  with  cheap  milk  —  back  in  the  butter  and  cheese  dis- 
tricts. They  broke  our  prices  down,  and  we  were  unable  to  main- 
tain them  afterwards.  That  was  the  history  down  to  that  time 
and  the  result  of  my  conference  with  the  Board  of  Directors  of 
the  Milk  Exchange.  The  Milk  Exchange  made  a  proposition  that 
some  of  the  farmers  join  and  they  elected  directors  of  the  Milk 
Exchange,  I  made  a  proposition  to  them  that  if  they  meant  to  do 
what  was  fair  and  right,  that  they  give  us  equal  representation 
on  the  board  and  if  the  board  of  directors  could  not  agree  that 
we  leave  it  to  a  referee,  but  they  ridiculed  that  idea  and  I  am 
sorry  to  say  that  some  of  our  farmers  were  foolish  enough  to  be 
drawn  into  the  proposition  of  going  onto  the  board  of  directors 
when  they  have  about  as  much  to  say  about  the  price  of  milk 
as  that  has,  just  about.  It  is  a  simple  fact  and  I  cannot  under- 
stand why  any  one  tries  to  get  away  from  it  that  the  prices  made 
by  the  Milk  Exchange  are  the  guide,  absolutely  the  guide.  I  do 
know  that  it  is  and  has  been  for  years  the  guide  throughout  the 
country,  either  the  exchange  or  Borden's.  I  don't  know  of  any 
difference  in  the  method  of  the  Consolidated  Milk  Exchange 
carrying  on  its  business  or  fixing  the  value  of  milk  than  that  used 
by  the  Milk  Exchange  Limited.  As  to  the  age  of  milk  when  it 


90  [SEXATE 

gets  into  New  York:  Sunday  night's  milk,  if  it  isn't  more  than 
forty  miles  from  here,  gets  in  here  Tuesday  morning.  And  you 
take  the  milk  train  that  starts  back  in  this  outside  territory  where 
the  dealers  go  for  milk  clear  back  into  the  interior,  Pennsylvania 
and  New  Jersey  and  up  in  Vermont  and  off  in  these  different 
directions  where  they  start  the  milk  train  at  six  o'clock  in  the 
morning  and  that  milk  is  in  transit  until  eleven  or  twelve  o'clock 
the  next  night  getting  into  New  York.  Therefore  you  can  see 
that  it  is  Tuesday  morning  before  it  is  distributed  here;  ab- 
solutely wrong  —  no  occasion  for  it.  Milk  begins  to  deteriorate 
in  less  time  than  forty-eight  hours.  I  think  the  situation  could 
be  remedied.  It  could  be  done  if  the  railroads  would  join. 
Couldn't  do  it  with  the  dealers  because  they  are  not  in  sympathy 
with  the  idea;  they  would  not  put  it  into  practice  for  the  reason  it 
would  compel  them  to  pay  better  prices  and  more  regular  prices 
to  the  farmers.  But  if  the  railroads  would  make  rates  according 
to  the  distance  they  haul,  if  they  have  got  a  short  haul,  make 
the  rate  for  a  short  haul,  and  then  join  in  trains,  regulate  their 
trains  so  that  the  milk  —  well,  I  might  say  that  some  years 
ago  I  went  to  Samuel  Eelton,  vice-president  of  the  Erie  rail- 
road, and  made  a  proposition  to  him  to  have  milk  shipped  as 
quickly  as  possible;  have  the  morning  milk  come  down  on  the 
Orange  County  Express,  lead  a  car  at  Goshen ;  I  agreed  to  have 
that  car  loaded  with  morning's  milk.  That  milk,  if  it  came  down 
on  the  Orange  County,  would  have  been  delivered  here  in  New 
York,  the  same  morning's  milk,  at  10  o'clock,  11  o'clock  possibly; 
shortly  after  the  arrival  of  the  train.  Now,  he  took  that  idea 
up  and  was  veiry  favorable  to  it,  and  if  Mr.  Felton  had  remained 
with  the  Erie  railroad  it  would  have  been  put  into  operation,  been 
tested  so  that  we  would  have  tried  it  and  see  how  it  worked  out. 
But  he  went  with  the  Queen  &  Crescent  I  think  it  was,  and  some- 
body came  in  and  didn't  understand  the  situation  and  so  it  went. 
Now,  the  trouble  is  that  the  D.,  L.  &  W.,  the"  O.  &  W. 
and  when  Westcott  was  alive,  the  New  York  Central 
railroads,  the  railroads  that  have  got  the  long  haul,  wanted  to 
keep  the  milk  business  because  it  is  the  best  paying  trains  they 
have  got  on  the  ro>ad,  even  that  any  passenger  trains  that  they 
have  had  or  any  other  kind  of  freight ;  they  want  that  business ; 


No.  45.]  91 

they  had  an  agent  in  charge  of  that  department  with  the  Erie  who 
was  very  much  afraid  that  if  they  got  into  a  wrangle  with  the 
other  milk  agents  of  the  railroads,  and  the  fact  that  the  others 
were  a  little  bit  smart  for  the  Erie  man  and  they  threatened 
him  that  if  they  put  the  price  down  for  the  nearby  territory 
that  they  would  put  it  down  all  along  the  line  anyway  and  the 
result  was  that  the  Erie  lost  all  its  nearby  business.  The  other 
roads  built  up  a  business;  take  the  Ontario  &  Western,  didn't 
have  anything.  They  are  shipping  more  to-day  than  the  Erie. 
The  Delaware,  Lackawanna  &  Western  didn't  have  anything  until 
Mir.  Westcott  took  hold  of  it,  and  the  Erie  was  compelled  to  go 
and  build  ice  houses  and  go  way  out  beyond  their  natural  terri- 
tory in  order  to  keep  from  breaking  its  price  of  freight  rates, 
and  in  the  suit  by  the  dealer  that  they  had  exhausted  the  nearby 
territory,  I  told  Mr.  Felton  that  if  he  would  put  that  idea  into 
operation  I  would  agree  within  twenty-four  hours  to  give  him 
every  can  of  milk  west  of  Port  Jervis  that  he  was  getting  before 
and  agree  fer  each  of  the  counties  to  double  the  supply  of  milk 
in  Orange  county.  Until  something  is  done,  the  people  of  New 
York  city  will  use  milk  which  has  deteriorated  by  age.  They 
do  not  get  a  satisfactory  article,  and  this  wrangle  will  be  con- 
tinuous. There  is  an  improved  condition  here  in  New  York  city 
that  has  changed  by  time  to  a  certain  extent.  I  say  it  has  im- 
proved because  it  makes  fewer  people  to  deal  with,  and  that  is  a 
consolidation  of  the  smaller  concerns  into,  for  instance,  take  the 
Sheffield  farms  that  have  been  buying  up,  Beakes  has  been  buying, 
and  there  is  the  Mutual,  the  Empire,  all  these  other  concerns  been 
buying,  the  MeDermott  have  been  buying  a  lot  and  they  have  got 
a  lot  of  the  smaller  ones  out  of  the  way.  The  exchange  price  is 
published  in  all  our  papers.  In  my  vicinity,  contracts  for  the 
sale  of  milk  at  exchange  prices  are  ordinarily  made  on  the  first 
of  April  and  the  first  of  October.  There  is  a  good  deal  of  milk 
that  is  sold  now  by  the  month  —  not  under  contract  so  much.  I 
should  say  there  are  eight  or  ten  creameries  within  deliverable 
distance  from  my  house  and  everyone  of  them  except  Bordens 
now  buys  on  exchange  prices.  I  do  not  know  exactly  how  much 
it  costs  to  produce  a  quart  of  milk  but  I  do  not  believe  that  a 
man  to-day,  with  the  present  cost  of  feed  and  labor,  can  produce 


92  [SENATE 

milk  for  much  less  than  three,  four  and  five.  I  mean  three  cents 
for  four  months,  four  cents  for  four  months  and  five  cents  for 
four  months.  As  to  knowing  whether  there  exists  any  combina- 
tion among  the  dealers  in  !New  York  city  to  fix  the  price  of  milk 
paid  by  them  to  the  producer,  I  do  not  know  to  the  extent  of 
being  present  at  any  joint  meeting  where  a  discussion  of  that 
kind  took  place.  I  do  know  what  the  feeling  is  and  has  existed 
here  for  a  good  many  years  among  the  dealers.  I  have  argued 
with  them  in  regard  to  better  prices  for  the  farmer,  that  they 
have  got  to  have  more  money  for  the  milk  in  the  city,  and  I 
know  there  has  been  a  feeling  that  they  were  going  to  do  it. 
Borden's  people  tried  one  year  and  the  others  stole  the  trade  and 
they  quit  and  the  Sheffield  people  got  it,  and  this  year  they  seem 
to  have  had  an  affinity  of  mind,  something  that  has  happened  to 
hit  it  together.  There  is  not  the  slightest  doubt  in  my  mind  but 
what  a  combination  exists  among  the  dealers  in  New  York  city 
to  fix  the  price  to  the  producer  and  the  producer  has  to  take  that 
price.  I  would  suggest  an  equal  representation  on  the  board,  of 
the  milk  dealers  and  representatives  of  the  producers,  and  also 
consumers,  as  a  substitute  for  the  quotations  now  made  by  the 
Milk  Exchange  which  would  be  more  beneficial  to  the  farmer.  1 
presume  that  I  have  seen,  in  my  life,  a  thousand  times,  milk 
taken  from  the  dlifferent  creameries,  taken  from  the  cold  milk 
and  either  made  into  cream,  either  used  in  the  manufacture  of 
butter,  or  else  it  was  added  to  other  milk  to  bring  up  the  standard. 
I  have  not  been  as  familiar  with  creameries  in  the  last  few  years 
as  I  was  prior  to  that  time.  Then  it  was  an  ordinary  e  very-day 
occurrence ;  I  don't  believe  that  it  exists  as  much  as  it  did  a  few 
years  ago.  I  know  that  cream  is  kept  for  weeks  in  the  summer 
time,  about  the  early  part  of  June.  Sometimes  it  is 
kept  as  long  as  thirty  or  sixty  days.  I  have  never  seen  it  but 
I  have  no  doubt  but  what  it  has  been  kept  at  least  thirty  days. 
As  to  the  system  known  as  standardizing  milk,  that  is,  grading 
it  to  straight  skimmed,  3  per  cent.,  3%  per  cent,  and  four  per 
cent,  butter  fat,  each  package  to  be  marked  so  that  it  can  be 
easily  identified,  and  heavy  penalties  imposed  for  any  violation, 
I  think  that  would  be  rather  difficult  to  enforce.  It  can  be  done 
if  you  have  got  the  machinery,  no  doubt  about  that,  but  do  the 


Xo.  45.]  93 

public  know  that  a  milk  that  is  rich  in  butter  fat  is  not  as  whole- 
some as  a  milk  that  is  not?  That  is  the  fact.  Take  a  Jersey, 
it  is  almost  impossible  to  bring  a  Jersey  calf  up  on  a  Jersey  cow, 
on  its  own  mother's  milk.  We  get  a  hardier,  better  calf,  to  put 
him  011  the  native  cow  or  Holstein.  I  would  not  have  this  rich 
butter  fat  milk  for  my  family  to  drink.  I  was  thinking,  when 
you  first  suggested  it,  Mr.  Referee,  that  perhaps  the  idea  was 
to  have  high  prices  on  the  high  butter  fats  and  so  on  down.  The 
impression  I  am  afraid  would  be  to  the  public,  that  in  buying 
a  cheaper  milk  in  price,  they  would  be  getting  a  cheaper  grade, 
but  the  public  would  possibly  soon  familiarize  themselves  with 
that  and  if  they  found  that  they  could  buy  as  much  real  value 
for  two  cents  as  they  could  buy  for  six  cents,  they  would  take 
the  cheaper,  and  as  an  actual  fact,  if  that  situation  existed  and 
3  per  cent,  butter  fat  was  sold  to  the  poorer  people,  the  poor 
people  would  be  getting  a  more  wholesome  milk  than  the  people 
who  would  pay  the  higher  price  and  that  would  be  a  highly  de- 
sirable result. 

Information  sent  in  at  request  of  Referee: 

As  to  graded  milk,  the  effect  of  flush  milk  in  the  market,  the 
long  distance  haul  by  railroads,  and  my  explanation  of  the  propo- 
sition originally  made  by  the  then  proposed  Consolidated  Exchange 
for  farmers  to  subscribe  to  one-half  the  capital  stock.  In  answer 
to  the  proposition  made  by  the  Consolidated  Milk  Exchange  to  sell 
50  per  cent,  of  their  stock  to  the  farmers  and  give  them  repre- 
sentation on  the  Price  Making  Committee  would  say  that  about 
the  time  of  the  shift  from  the  Limited  to  the  Consolidated  Milk 
Exchange,  I  made  the  following  in  lieu  of  the  one  proposed  by 
them,  namely  that  if  the  Exchange  would  incorporate  in  their 
by-laws  that  in  the  forming  of  a  Price  Making  Committee  the 
farmers  should  have  equal  representation  without  regard  to  stock 
holdings,  said  farmer  representatives  to  be  selected  by  recognized 
organization  of  farmers  in  the  country  producing  milk,  and  if  at 
any  time  this  Price  Making  Committee,  composed  of  equal  repre- 
sentation of  dealers  and  farmers,  should  fail  to  agree,  that  then 
the  producers  should  name  a  referee,  the  milk  dealers  a  referee, 
and  if  those  two,  composed  of  disinterested  business  men,  were 


94  [SENATE 

unable  to  agree,  that  the  two  should  then  select  a  third,  and  what- 
ever-decision was  arrived  at  by  a  majority  or  all  of  the  referees 
should  be  accepted  and  abided  by  dealers  and  producers.  My 
reason  for  doing  this  was  that  it  was  perfectly  apparent  to  all  that 
the  dealers  could  at  any  time  buy  a  few  shares  of  stock  from  some 
farmer  and  obtain  control  of  the  Price  Making  Committee.  So 
far  as  I  can  see  the  question  of  grading  milk  and  putting  the  same 
on  the  basis  of  butter  fat  ranging  'from  three  to  four  per  cent.,, 
would  seem  fair  to  producer  and  consumer,  provided  the  enforce- 
ment of  the  law  was  done  by  the  State  through  a  commissioner  or 
co.mmissioners  who  are  thoroughly  familiar  with  the  production 
of  milk,  the  operations  of  the  middle  men  and  the  needs  of  the 
consumer.  I  should  be  opposed  to  the  sale  of  skim  milk  in  Greater 
New  York  at  the  present  time,  believing  it  would  be  hotter  to  test 
the  ability  of  a  milk  commission  to  regulate  and  control  under  the 
aforesaid  proposition.  I  believe  it  would  be  necessary  t:>  have  a 
capable,  intelligent  commission  thoroughly  understand  the  milk 
business,  as  there  are  periods  of  the  yoar  when  it  is  necessary  to 
take  care  of  a  considerable  surplus  of  milk,  who  would  bo  able  to 
suggest  ways  and  means  of  obtaining  the  most  money  for  this 
surplus.  I  would  also 'suggest  that  from  a  hygienic,  sanitary  and 
healthful  standpoint,  that  the  age  of  milk  sold  in  Greater  Xe\v 
York  should  not  exceed  twenty-four  hours  from  producer  to  con- 
sumer, and  that  this  should  be  regulated  by  statute.  The  present 
rate  by  the  railroads  gives  a  twenty-six,  twenty-nine  and  thirty- 
two  cent  freight  zone,  and  in  my  opinion  these  zones  cover  tno 
much  territory  and  that  the  prices  should  be  readjusted  and  the 
prices  based  upon  the  distance  of  the  haul  rather  than  upon  pres- 
ent arbitrary  and  ununiform  rate  per  distance  of  haul. 
• 

EDWARD  B.  SANFORD  : 

I  reside  at  Warwick,  X.  Y.  I  am  a  farmer  and  treasurer  of 
the  New  Jersey  Corporation  of  the  Sanford  Dairy  Company.  I 
have  produced  milk  since  1886.  The  principal  office  of  the  corpo- 
ration is  at  No.  138  West  Thirty-first  street.  The  capital  stock 
of  the  corporation  is  $27,000.  We  have  paid  one  dividend  about 
a  year  ago,  5  per  cent.  We  have  two  creameries,  one  at  Delhi, 
Delaware  county,  Now  York,  which  has  not  been  operated  for  one 


No.  45.]  95 

or  two  years,  and  one  at  Circleville,  Orange  county,  New  York. 
We  also  have  one  at  Mulford,  Sussex  county,  New  Jersey,  and  one 
at  Great  Meadows,  Warren  county,  New  Jersey.  I  was  not  a 
member  of  the  Milk  Exchange  Limited,  and  I  am  a  stockholder  of 
the  Consolidated  Milk  Exchange  and  Avas  a  director  for  about  two 
years  up  to  a  year  ago.  I  have  never  been  an  officer,  director, 
stockholder  or  employee  of  Borden's  Condensed  Milk  Company, 
Sheffield  Farms,  Slasson  Decker  Company  or  the  Mutual  Milk  and 
Cream  Company.  I  own,  five  shares  of  stock  in  the  Orange  County 
Milk  Association.  I  attended  about  half  of  the  meetings  while  I 
was  director  of  the  Consolidated.  I  don't  remember  clearly  what 
took  place  at  the  meeting.  To  my  knowledge  the  Consolidated 
never  dealt  in  milk.  I  used  to  attend  directors  meetings  more  on 
account  of  my  real  estate  interests  then  I  did  in  relation  to  milk 
business.  We  sometimes  pay  Exchange  prices,  at  other  times 
Borden's.  We  do  not  retail  much  milk,  but  soon  after  November 
first  we  raised  the  price  to  some  of  our  customers  to  nine  cents. 
Otir  business  is  mostly  wholesale.  Our  retail  business  would 
probably  not  amount  to  more  than  $365  per  year.  I  have  no 
recollection  of  Gorman  calling  on  me  in  reference  to  a  campaign 
of  education.  My  recollection  is  that  Mr.  Laemmle  was  the  secre- 
tary of  the  Consolidated  at  the  time  I  was  a  director.  I  should 
say  that  it  cost  from  two  and  a  half  to  three  and  a  quarter  cents 
to  produce  a  quart  of  milk.  I  never  separate  the  milk  and  reunite 
the  skim  milk  to  enough  of  the  cream  to  make  a  milk  that  will  run 
3  per  cent,  butter  fat  in  order  to  comply  with  the  law.  I  have  been 
told  of  cases  where  it  has  been  done,  but  not  with  the  object  you 
mentioned,  but  for  the  purpose  of  cleanliness.  I  am' not  a  mem- 
ber of  the  Milk  Dealers  Protective  Association.  I  do  not  know 
Bleffort.  To  get  the  best  results  by  the  gravity  process  in  obtain- 
ing cream,  the  milk  should  be  cooled  as  soon  as  possible  and  should 
not  be  greatly  agitated.  Milk  which  is  treated  this  way  will  issue 
a  more  distinct  line  of  bottled  cream  and  milk  than  milk  that  has 
been  agitated.  When  we  have  an  unusual  high  price,  then  we  find 
two  conditions  both  fatal  to  us  as  dealers.  One  is  that  the  high 
price  to  the  wholesalers  causes  him  to  curtail  his  consumption. 
You  may  ask  me  what  he  does.  I  don't  know.  That  has  been 
asked  many  times.  He  does  curtail  the  consumption,  that  I  do 


96  [SENATE 

know,  from  ten  to  thirty  per  cent,  whether  he  uses  a  substitute  or 
whether  he  shortens  up  the  measure,  I  know  he  uses  less  milk. 
Also  the  higher  price  causes  the  producer  of  course  to  reach  for  it 
with  cattle  and  feed,  and  before  we  know  it  we  are  in  the  con- 
dition we  are  today  and  we  have  a  great  deal  more  milk  than  we 
know  what  to  do  with.  We  have  what  we  term  a  flush.  I  think, 
in  fact,  if  it  were  not  for  some  very  great  sacrifices  we  are  making 
in  the  market,  we  would  have  50  per  cent,  more  than  we  want. 
The  flush  that  is  caused  by  the  holding  back  usually  clears  itself  - 
unless  it  is  followed  by  a  period  of  warm,  depressing  weather, 
something  of  that  sort  which  also  stimulates  the  production;  any 
lowering  of  temperature,  open  winter,  as  it  is  termed,  usually 
makes  plenty  of  milk.  The  fact  of  lowering  the  price,  among 
others,  would  be  theoretically  to  diminish  the  supply.  As  a  matter 
of  practice  that  might  take  a  little  time,  but  in  time  it  would  be 
accomplished. 

MILTON  L.  SANFOED: 

I  reside  at  Warwick,  New  York,  county  of  Orange,  about  sixty- 
four  miles  from  New  York,  and  am  a  farmer,  producing  milk 
and  selling  it  myself  in  this  market.  I  buy  some  milk  as  well 
as  sell  it.  •  I  have  no  store  or  office  in  New  York  city  but  have 
a  creamery  at  Warwick.  I  work  for  the  Mutual  .Milk  and  Cream 
Company  part  of  my  time.  I  own  from  fifteen  to  eighteen  shares 
of  stock  in  the  Consolidated  Milk  Exchange.  I  once  owned  a 
block  of  50  *lmr«.  I  sold  those.  I  think  I  acquired  my  last 
block  of  stock  in  1900.  I  own  from  fifty  to  one  hundred  and  fifty 
shares  of  stork  in  the  Milk  Exchange  Limited.  I  have  been  an 
officer  and  director  of  the  Consolidated  Milk  Exchange.  I  was  a 
director  of  the  Consolidated  Exchange  from  its  incorporation  till 
October  of  1906  or  1907,  then  I  resigned.  I  was  a  director  in 
the  Milk  Exchange  Limited  about  two  or  three  years  before  I 
went  out  of  business.  I  was  the  first  trader  of  the  Consolidated 
Milk  Exchange.  Two  or  three  weeks  ago  I  bought  a  few  shares 
of  stock  in  the  Mutual  Milk  and  Cream  Company  but  I  have  not 
as  yet  received  them  so  I  don't  know  whether  I  am  a  stockholder 
of  record  or  not.  The  nature  of  my  work  for  the  Mutual  Milk 
and  Cream  Company  is  selling  of  icehouses,  repairing  of  country 


No.  45.]  97 

creameries,  making  contracts  with  fanners  or  rather,  after  the 
prices  are  handed  to  me,  to  go  and  meet  farmers  and  talk  it  over ; 
any  miscellaneous  things,  most  anything  they  call  on  me.  Some 
times  I  work  for  fifteen  days  steady,  then  I  don't  work  for  a  week. 
At  an  early  date  the  meetings  of  the  board  of  directors  of  the 
Milk  Exchange  Limited  were  held  at  20-22  North  Moore  street, 
later  they  were  held  at  6  Harrison  street.  Meetings  of  the  board 
of  directors  of  the  Consolidated  Milk  Exchange  were  held  at 
Jersey  City,  also  in  New  York  at  6  Harrison  street.  I  don't 
know  as  there  was  any  difference  in  the  nature  of  the  business 
carried  on  by  the  Milk  Exchange  Limited  and  the  Consolidated 
Milk  Exchange.  Think  it  was  about  the  same.  In  an  early  day 
of  the  Limited  Exchange,  as  I  remember  it,  they  took  the  farmers' 
milk  and  sold  it  on  a  commission,  but  never  any  of  that  was  done 
after  I  came  in  the  board.  It  was  done  previous  to  that  'but  not 
after  I  came  in.  During  the  time  that  I  was  on  the  board  of 
the  Milk  Exchange  Limited  the  business  transacted  was  very 
similar  to  that  of  the  consolidated.  The  nature  of  the  business 
was  the  finding  the  value  of  milk.  In  the  consolidated  there 
was  a  discussion  as  to  the  value  among  the  different  members; 
same  saw  one  side  and  some  saw  it  another,  and  then  they  fixed 
a  value. 

Q.  And  that  took  the  form  of  a  resolution,  that  was  entered 
in  the  board  of  directors  minutes?  A.  Why,  from  the  price  com- 
mittee, as  I  remember. 

When  I  left  Borden's  Mr.  Laemmle  was  secretary.  I  think 
there  were  some  members  of  the  old  Milk  Exchange  Limited 
board  that  went  into  the  board  of  the  Consolidated  Milk  Ex- 
change. I  did  myself.  I  attended  a  number  of  special  meetings 
of  the  board  of  directors  of  the  Consolidated  Milk  Exchange  to 
consider  the  value  of  milk.  The  object  of  the  exchange  in  fixing 
the  value  of  milk  was  so  that  we  have  some  way  of  paying  our 
bills  and  know  what  they  are  going  to  be.  I  buy  my  milk  at 
the  exchange  price.  I  specified  in  my  contract  when  I  bought 
milk  on  the  exchange  and  also  specified  when  I  did  not  buy  on 
the  exchange.  About  twenty-five  or  thirty  years  ago  men  would 
come  in  here  and  you  buy  his  milk  on  the  New  York  market 


98  [SENATE 

price.  We  had  no  exchange.  We  would  inquire  around  when 
it  was  time  to  pay.  The  .price  was  so  and  so.  There  was  differ- 
ent people  who  pretended  to  make  the  price.  There  was  no  ex- 
change. We  would  start  in  and  settle  on  that.  First  thing  you 
would  get  a  letter  from  a  farmer  for  the  difference  because  his 
neighbor  Tom  Jones  got  a  quarter  or  more  or  half  more,  and 
when  these  exchanges  were  organized  I  think  the  fanners  were 
about  as  anxious  to  have  them  as  the  dealers.  I  handle  certified 
milk.  I  read  in  the  New  York  papers  and  casually  heard  it 
talked  over  that  the  price  of  bottled  milk  was  on  November  1, 
1909,  raised  from  eight  to  nine  cents.  I  heard  no  discussion 
among  dealers  previous  to  November  1st  in  reference  to  the  raise. 
I  think  when  I  resigned  in  October,  1906  or  1907,  Mr.  James 
A.  Howell  went  on  the  board  in  my  place.  I  know  nothing  about 
any  practice  of  separating  cream  from  the  milk  for  the  purpose  of 
standardizing  it,  making  it  run  3  per  cent,  butter  fat.  I  don't 
know  what  it  costs  to  produce  a  quart  of  milk.  As  to  my  knowl- 
cdir<'  when  tlio  Mutual  Milk  and  Croam  Company  raised  its  price 
of  bottled  milk  in  ~New  York  to  nine  cents  a  quart  on  November 
1st,  I  won't  say  whether  it  was  done  November  1st  or  afterwards. 
They  told  me  in  the  office  that  they  had  raised  the  price  to  nine 
'cents  a  quart  a  few  days  afterwards.  I  don't  know  what  day  they 
did  it. 

HENRY  STEVENS: 

I  reside  at  Lacona,  Oswego  county,  about  one  hundred  and  fifty- 
five  miles  from  New  York.  I  have  always  been  a  farmer.  I  have 
two  farms,  both  of  which  are  operated  as  dairy  farms.  I  have 
no  figures  from  which  I  could  state  the  cost  of  producing  a  quart 
of  milk  during  1909,  and  do  not  know  how  much  milk  I  produced. 
My  milk  as  a  rule  goes  to  a  co-operative  cheese  and  butter  factory. 
I  used  to  sell  it  to  the  Mutual  Milk  and  Cream  Company,  six 
miles  from  my  farm.  I  think  the  last  was  a  year  ago  last  winter. 
The  price  was  a  certain  amount  that  we1  agreed  upon  extending 
over  one  to  three  months  in  advance,  or  perhaps  five  months,  and 
I  sold  this  milk  to  these  people  to  a  certain  time.  I  think  it  was 
the  first  of  March,  and  at  that  time  they  wanted  me  to  agree  to 
take  it  two  months  longer  until  the  first  of  May  and  I  did  not 


No.  45.]  99 

feel  just  like  doing  it  without  consulting  with,  the  patrons  of  the 
factory,  and  finally  I  fixed  it  with  them,  and  if  we  decided  to 
take  this  milk  the  extra  two  months,  that  they  would  take  it  and 
we  were  to  notify  them  a  week  or  two  before  the  time  expired. 
We  did  not  make  any  written  contract.  It  was  all  verbal  and  we 
sent  them  word  when  we  would  take  it,  but  when  the  time  ex- 
pired, they  sent  up  word  the  same  as  today  that  tomorrow  they 
did  not  want  our  milk.  Then,  of  course,  our  factory  man,  he  took 
it  then  and  made  it  up ;  and  they  have  done  in  that  same  way  sev- 
eral times,  that  is,  they  have  gone  through  the  country  there 
when  they  are  short  of  milk,  and  bought  it  for  a  certain  length 
of  time.  There  is  a  station  at  Lacona,  what  we  call  a  milk  sta- 
tion, that  pays  the  exchange  price.  There  is  a  cheese  factory 
right  in  the  same  village  that  has  made  butter  or  shipped  creann 
and  made  skimmed  cheese,  and  they  have  been  able  the  past  year- 
to  pay  the  patrons  more  for  milk  than  they  could  get  over  to  the- 
station.  The  facts  are  the  station  has  not  got  but  a  very  little.- 
milk  except  they  went  in  the  west  part  of  town,  perhaps  five 
miles,  and  contracted  with  a  factory,  all  tke  milk  that  came  to 
this  factory  until  the  first  of  December.  Outside  of  that  they  get 
very  little  milk  from  the  farmers  because  they  could  not  pay  as 
much  as  these  men  that  made  the  milk  up  into  cheese  and 
cream.  I  don't  know  as  to  whether  there  is  a  combination  or 
agreement  among  the  dealers  of  New  York  city,  and  I  don't  know 
whether  the  combine  did  raise  the  price  of  milk  the  first  of  No- 
vember. I  might  have  an  opinion  and  that  opinion  is  that  they 
are  a  combination.  I  base  that  on  the  fact  that  they  have  raised 
the  price  about  the  same  time.  I  heard  no  discussion  among 
dealers  as  to  raising  the  price  prior  to  November.  They  use 
the  separator  in  my  vicinity  but  not  to  reduce  the  milk  to  a  3 
per  cent,  butter  fat  standard.  They  separate  the  cream  and  ship 
it  to  New  York  and  make  it  into  butter  and  make  the  skimmed 
milk  up  into  cheese.  I  have  been  breeding  Holsteins  about  thirty- 
five  years  and  I  think  their  milk  will  test  on  an  average  about 
three  and  seven  tenths  butter  fat,  during  the  season.  I  think  if 
a  producer  can  get  from  three  and  one-third  to  four  cents  a  quart 
that  he  would  be  doing  quite  well.  I  would  not  expect  for  ship- 
ping milk  and  making  cheese  that  with  some  of  these  breeds 


100  [SENATE 

that  give  a  large  percentage  of  butter  fat  and  a  small  amount  of 
milk  that  they  could  make  very  much  money,  but  I  think  as  a 
rule  that  if  farmers  could  get  around  four  cents  a  quart  for  their 
milk  they  can  do  better  than  they  can  in  anything  else.  There 
is  one  thing  now  in  the  cost  of  milk.  The  sanitary  conditions 
have  got  to  be  a  great  deal  higher  than  they  used  to  be,  and  that 
all  makes  more  expense.  I  think  there  are  a  great  many  men 
sent  out  to  inspect  the  plants  and  property  that  are  very  incom- 
petent. 

WILLIAM  H.  STRONG: 

I  reside  at  Goshen,  between  Goshen  and  Middletown,  and  my 
business  is  farming.  My  farm  is  about  sixty-three  miles  from 
the  city.  I  sell  my  milk  to  Bordens  and  at  Bordens'  price.  The 
creamery  is  at  Middletown.  I  heard  no  discussions  among  any 
one  connected  with  Bordens  or  any  of  the  dealers  with  reference 
to  the  necessity  of  advisability  of  a  raise  in  price  from  eight  to 
nine  cents  a  quart  in  Xrw  York  city.  I  know  of  no  agreement. 
I  produced  194,985  pounds  of  milk  on  my  farm  during  the  year 
1009,  that  would  be  about  95,000  quarts.  The  cost  of  production 
of  that  milk  per  quart  would  be  pretty  close  to  three  and  one- 
fourth  cents.  Entering  into  the  cost  of  production  I  figured  mill 
feeds,  hay,  labor  and  interest  on  investment.  At  the  presmit  way 
things  are  we  couldn't  make  any  profit  at  less  than  three,  four 
and  five.  In  the  same  manner  Mr.  Bennett  figures  it,  I  don't 
know  anything  of  a  combination  among  the  dealers  in  Now  York 
city.  If  I  couldn't  sell  my  milk  to  Bordens,  I  could  sell  it  to 
the  Diamond  Dairy  Company  or  the  Orange  County  Milk  Asso- 
ciation. I  know  of  no  custom  in  which  cream  is  taken  from  the 
milk  so  as  to  make  it  run  3  per  cent,  butter  fat  and  save  the 
excess  of  cream. 

HARRY  VAIL: 

I  am  a  farmer  and  reside  at  Millford,  New  York,  and  I  have 
been  in  that  business  about  ten  years.  I  have  produced  about 
80,000  pounds  of  milk  which  would  be  equivalent  to  about 
44,000  quarts.  It  costs  me  about  three  a.nd  two-fifths  cents  to 
produce  a  quart  of  milk  during  the  year  190-9.  In  order  to 
realize  a  fair  profit  I  think  I  would  have  to  sell  milk  at  about 


No.  45.]  101 

four  cents  in  summer  and  five  cents  in  winter,  or  about  an  aver- 
age of  four  and  one-half  cents  the  year  i-paad..  I  have .; sold  my 
milk  to  Borden's  for  the  last  two  years  under  contract.  We  have 
two  prices  in  our  country,  an  Exchange,,  and  also  .prlcfes;  made  by 
Borden's,  and  we  can.  take  our  pick.  Most  of  the  milk  in  my 
country  is  sold  at  either  Borden's  or  Exchange  prices.  I  think 
that  Borden's  prices  and  the  Exchange  prices  average  about  the 
same  throughout  the  year.  During  the  past  two  or  three  years 
they  have  been  about  even.  The  average  cost  or  production  was 
about  the  same  as  the  selling  price,  and  I  attribute  that  to  the  fact 
that  we  are  at  the  mercy  of  the  dealers,  Borden's1  and  the  Ex- 
change members,  and  we  have  got  to  take  their  prices  or  keep 
our  milk.  There  are  no  cheese  factories,  creameries  or  butter 
factories  to  compete  against  them.  When  it  costs  3  2/5  cents  to 
produce  a  quart  of  milk  throughout  the  year  and  the  dealers  in 
New  York  city  are  charging  9  cents  a  quart,  I  think  it  is  too 
much  profit  for  the  middle-man.  I  have  fifty  cows  but  am  only 
milking  twenty-one.  I  get  280  quarts  a  day  from  those  twenty- 
one  cows  for  six  months.  I  have  no  knowledge  as  to  the  existence 
of  a  combination.  I  do  not  understand  why  the  price  is  kept  so 
low.  It  looks  as  though  there  should  be  something  in  order  to 
get  at  the  price,  and  I  do  not  know  whether  the  'Consolidated 
Milk  Exchange  is  beneficial  to  the  producer.  I  saw  a  separator 
in  operation,  and  I  saw  them  separate  the  cream  from  the  milk, 
and  I  saw  by  the  tubes  leading  from  the  cream  vat  and  the  milk 
vat  that  they  reunited  portions  of  the  cream  with  the  skim  milk, 
and  then  this  mixture  connected  below  and  ran  into  a  tank  and 
then  went  to*  the  bottling  table.  I  do  not  know  whether  they  re- 
united all  of  the  cream  or  simply  enough  to  make  it  3  per  cent, 
butter  fat.  Borden's  hold  us  strictly  to  all  the  terms  of  the  con- 
tracts that  we  sign  which  we  are  willing  to  do  if  we  get  paid  for 
the  milk.  My  own  cows  are  not  flush.  They  are  milking  very 
fair.  I  have  known  the  Howells1  Condensed  Milk  Company  at 
Pine  Island  to  have  several  thousand  cans  of  cream  on  hand 
holding  them  for  hot  weather.  The  practice  is  to  make  up  this 
cream  when  the  milk  is  flush  and  hold  it  may  be  two  or  three 
months  afterward.  They  keep  it  by  burying  it  in  ice.  It  would 
look  to  me  as  though  the  farmer  ought  to  get  half  when  the  con- 


102  [SENATE 

snmer  has  to  pay  9  cents1  a  quart.  The  Exchange  price  for  milk 
during1  Of-cvinber  ir  i;>\  M  ction  was  4*4  cents  per  quart.  A 
quart  of  milk  weighs  2Vs  pounds,  and  if  the  Exchange  price  is 
41/!  o'lit-  that  wo  aid  mu'.n,  the  same.  Following  is  the  expense 
of  my  dairy  for  the  month  of  December,  1909 : 

Feed  bill    .' $117  64 

Labor *.  .  .  . 75  00 

Nine  tons  sugar  beets 72  00 

Hay 112  18 

Interest,  5  per  cent,  on  cows  and  barn 14  00 

Four   bundles    of   straw 32 

Carting  milk    15  50 

Taxes  on  cow  barns    .  2  17 


Total $408  81 

hi  return  for  this  cost  to  produce  I  sold  milk  for  $339.44. 

WILLIAM  A.  WELLS: 

I  reside  at  Goshen,  and  am  cashier  of  a  bank.  I  was  born  and 
brought  up  on  a  farm  and  worked  on  a  farm  until  about  ten  years 
ago.  We  produced  milk  to  sell  in  the  New  York  market  —  I,  in 
connection  with  my  father.  I  am  not  in  the  milk  business  at 
present.  I  believe  I  am  a  stockholder  in  the  Consolidated  Milk 
Exchange.  The  shares  came  through  my  father.  I  have  never 
attended  any  meetings  of  the  directors  or  stockholders  of  the  Con- 
solidated Milk  Exchange.  I  should  think  that  the  price  was 
established  or  fixed  by  the  Consolidated  Milk  Exchange  and  that 
the  farmers  in  my  locality  expected  and  did  get  the  price  that 
was  established.  The  farmers  in  my  district  sell  their  milk  at 
either  Exchange  or  Borden  price.  I  do  not  know  of  any  fact  that 
would  lead  me  to  believe  that  there  was  a  combination  to  raise 
the  price  of  milk  on  or  about  November  1st, 

RlJFUS   WlKOFF. 

I  reside  a  little  out  of  Cooperstown,  in  Otsego  county  and  have 
been  a  farmer  all  my  life.  I  have  two  farms,  one  I  operate  my^ 
self  and  the  other  I  let  out  to  tenants.  I  have  about  thirty  cows. 
During  the  year  1909,  from  thirty  cows,  I  produced  63,763  quarts 


No.  45.]  103 

of  milk.  It  cost  me  about  three  and  one-fifth  cents  a  quart  to 
produce  this  milk.  The  items  going  in  to  make  up  this  cost  gen- 
erally, are  capital,  feed  and  labor.  If  the  farmer  sells  at  four 
cents  a  quart,  he  is  realizing  what  I  would  regard  as  a  reason- 
able profit.  That  is,  average  four  cents  throughout  the  year.  My 
farm  is  about  three  hundred  miles  from  ~New  York.  I  think  1 
would  average  about  fifteen  milking  cows  during  the  year.  My 
cows  average  about  eleven  months  as  milking  cows.  I  consider 
the  average  cow  to  last  about  six  years  for  milk  production.  Cows 
generally  are  supposed  to  be  at  a  prime  from  five  to  ten  years. 
I  sometimes  get  sixty  dollars  for  beef  cows  after  1  am  through 
milking  them.  A  good  cow  about  three  years  old.  should  cost 
from  sixty  dollars  to  one  hundred  dollars.  Most  of  the  milk  in 
my  country  is  marketed  to  the  International  Milk  Produce  Com- 
pany, who  manufacture  different  kinds  of  cheese  and  they  make 
ice  cream  in  the  summer.  They  were  shut  off  with  a  little  sur- 
plus they  had,  that  is,  they  accumulated  a  little  surplus  and  they 
thought  they  would  start  a  trade  in  New  York  and  they  estab- 
lished a  little  market  there  and  put  $300  in  an  outfit,  and  gave 
a  man  $5  a  day  and  continued  it  until  they,  lost  $180  at  eight 
cents  a  quart.  That  is  what  I  was  told  yesterday.  It  cost  me 
ten  cents  a  hundred  to  draw  my  milk.  The  price  of  milk  was 
first  made  out  less  ten  cents.  In  1908,  I  produced  the  follow- 
ing amount  of  milk  from  my  farm:  January,  2,687  quarts; 
February,  3,349;  March,  4,576;  April,  5,657;  May,  8,210;  June, 
10,324;  July,  8,235;  August,  5,308;  September,  2,759;  October, 
2,349;  November,  1,816;  December,  2,733.  During  1909,  the 
average  price  per  quart  I  obtained  for  milk  was  $.0>2686<9.  In 
1908,  I  obtained  an  average  price  per  quart  of  $.0'2611  and  during 
the  year  1907  I  produced  milk  as  follows:  January,  4,226  quarts ; 
February,  4,045;  March,  5,939;  April,  5,939;  May,  7,278;  June, 
9,080;  July,  8,344;  August,  6,328;  September,  3,949;  October, 
2,776 ;  November,  1,832 ;  December,  1,474.  For  this  year,  I  re- 
ceived an  average  price  per  quart  of  $.0;26746.  I  have  read  some>- 
what  of  the  Consolidated  Milk  Exchange,  and  it  fixes  the  price 
that  the  dealers  of  New  York  city  pay  the  farmers  for  milk,  but 
I  have  never  taken  it  very  seriously  into  consideration.  Every  one 
has  believed  that  it  was  trying  to  rob  the  producer.  It  looks  to  us 


104  [SENATE 

as  if  they  make  their  prices  in  New  York  city.  Most  of  the  pro- 
ducers think  that  is  it.  I  don't  know  about  the  exchange  trying 
to  fix  the  price  to  be  paid  by  the  consumers.  I  know  in  our  section 
of  the  country  there  has  been  no  combination  at  all  to  put  up  the 
price  of  milk,  and  our  milk  price  is  about  the  same  as  it  has  been. 
It  does  not  affect  us  a  fraction  of  a  cent  one  way  or  the  other.  I 
sell  to  the  manufacturing  company  that  manufactures  milk  into 
cheese.  I  asked  the  gentleman  if  he  couldn't  pay  us  a  little  more 
since  the  advance  in  New  York  city  and  he  said  he  could  not,  as 
their  prices  were  not  reckoned  on  milk,  but  the  side  produces  from 
milk.  It  is  my  opinion  that  the  Consolidated  Milk  Exchange,  as 
it  is  at  present  constituted,  is  not  beneficial  to  us,  because  they  are 
not  paying  us  any  more  for  milk  —  no  more  than  they  have  paid  - 
and  not  anything  near  enough  for  producing  milk.  They  say  there 
were  some  men  in  my  county  using  a  separator  to  separate  the  milk 
from  the  cream,  and  after  the  milk  was  separated  from  the  cream 
and  reunited  them  so  that  the  milk  in  the  reunited  product  shall 
show  not  to  exceed  3  per  cent,  butter  fat,  but  it  was  not  profitable. 
They  were  sending  3  per  cent,  cream  to  New  York  and  selling  it 
for  what  they  could  get,  making  the  milk  or  cream  contain  what 
the  law  required.  No  doubt  that  was  the  case,  but  I  think  there  is 
very  little  of  it  going  on  now.  There  is  a  small  Borden  station  at 
Elk  Creek  in  my  county.  There  is  not  a  flush  of  milk  in  my 
vicinity  at  the  present  time.  I  do  not  know  that  there  is  a  flush 
of  milk  in  New  York  city  from  what  I  can  find  out  and  from  what 
I  have  read.  I  think  the  supply  and  demand  is  pretty  well 
balanced.  The  Board  of  Health  in  New  York  city  are  driving  out 
a  great  many  farmers  from  the  dairy  business.  These  farmers 
then  go  to  the  cheese  factories.  I  don't  know  whether  the  sepa- 
rator is  used  for  cleaning  or  purifying  milk.  I  don't  think  it  is. 
You  can  keep  cream  longer  than  milk  by  keeping  it  extremely 
cold,  down  to  40,  and  it  doesn't  do  it  any  good  if  you  can  keep  it. 
In  my  opinion,  cream  that  is  kept  two  or  three  months1  would  not 
be  wholesome  and  fresh  and  it  would  not  be  palatable  any  way. 

HENRY  YOUNG : 

I  reside  at  Goshen,  N.  Y.,  and  have  been  a  farmer  about  twenty 
years.  I  am  a  producer  of  milk  but  have  never  been  a  dealer.  I 
am  a  stockholder  and  director  of  the  consolidated  Milk  Exchange 


No.   45;  J  105 

and  have  been  a  director  about  three  years.     I  was  also  clerk  of 
the  Value  Committee.     I  was  made  such  about  two  years  ago.     I 
attended  the  last  meeting  about  the  15th  of  December,  1909.    We 
met  at  No.  6  Harrison  street.     Sometimes  they  made  reports  and 
sometimes  they  didn't  at  these  meetings.     I  saw  memoranda  in 
regard  to  values  lying  on  the  table  some  time  the  last  of  Novem- 
ber, but  I  don't  know  what  was  responsible  for  them  or  who  had 
charge  of  them.     Those  memoranda  were  ballots  taken  when  we 
were  fixing  the  value  of  milk,  just  say  informal  ballots,  five,  $1.25  ; 
eight,  $1.10.     The  list  of  prices  under  the  heading  "  Exchange 
Prices  "  in  the  "  Milk  Reporter "   are  the  same  figures  as  the 
values  arrived  at  by  the  Board  of  Directors.     There  were  eighty 
members  of  the  Association  and  seventeen  members  of  the  Board 
of  Directors.     They  sent  a  postal  card  as  to  the  value  of  milk  to 
every  subscriber  of  the  "  Reporter."    They  have  been  sending  them 
for  a  great  many  years.     I  sell  my  milk  at  present  to  a  man  in 
Paterson,  N.  J.,  a  Mr.  Brower.     I  have  no  written  agreement. 
I  get  the  market  price.     I  expected  to  get  the  exchange  price.     I 
did  get  the  exchange  price  —  the  price  that  was  published  by  the 
"  Reporter."     I  have  been  selling  to  this  man  about  six  months. 
Previous  to  that  I  sold  to  the  Orange  County  Milk  people  and  prac- 
tically got  the  exchange  price.     I  don't  know  of  any  agreement  be- 
tween the  members  of  the  Consolidated  Milk  Exchange  to  observe 
or  live  up  to  the  price  or  values  that  were  established  by  the  Board 
of  Directors.     I  don't  know  whether  there  was  any  agreement 
among  the  members  of  the  Consolidated  Milk  Exchange  ito  raise 
the  price  of  bottled  milk  from  eight  cents  to  nine  cents  .a  quart  in 
New  York  city  about  November  1,  1909.     I  heard  some  discus- 
sion among  the  members  of  the  Board  of  Directors  —  I  heard 
several  men  say  they  were  not  getting  enough  and  could  not  make 
their  expenses,  and  if  they  did  not  get  more  for  their  milk  they 
did  not  know  what  would  happen.     I  was  never  present  when  they 
agreed  to  raise  the  price  of  milk  at  that  date.    I  never  had  a  con- 
versation with  Mr.  Schoonmaker  except  three  years  ago,  and  at 
that  time  I  never  conversed  with  him  to  try  to  establish  a  con- 
certed action  in  setting  a  price  of  milk.     The  last  meeting  of  the 
Consolidated  Milk  Exchange  Board  of  Directors  was  in  the  last 
of  December,  about  the  30th.     I  don't  think  they  put  any  value 


106 


on  milk  at  that  time.  I  think  they  reported  "  no  change  in  value 
of  milk."  I  don't  think  they  passed  any  resolutions.  That  meet- 
ing was  held  at  No.  6  Harrison  street,  and  I  think  Mr.  William  B. 
Conklin  was  present.  There  were  about  twelve  or  thirteen  pres- 
ent. The  meeting  was  in  November  instead  of  December.  I  did 
feed,  he  has  to  own  hirses,machinery,  get  ice,  and  he  has  to  ice  the 
attend  a  meeting  in  Jersey  City  about  the  middle  of  December. 
The  committee  of  values  did  not  report  at  that  meeting.  That  was 
a  special  meeting.  Mr.  Laemmle  was  there.  In  the  production  of 
niilk  and  finally  delivering  it  to  the  creamery,  a  man  must  own 
or  rent  a  farm,  then  he  has  to  stock  it,  he  has  to  employ  labor  to 
milk  the  cows  twice  a  day,  he  has  to  cut  the  hay,  he  has  to  buy 
feed,  he  has  to  own  horses,  machinery,  get  ice,  and  he  has  to1  ice 
the  milk  up,  keep  it  half  a  day  and  deliver  it  to  the  creamery.  I 
don't  remember  what  the  average  price  of  milk  was  during  the 
year  1909.  I  am  sure  there  is  no  profit  to  the  producer  when  he 
has  to  sell  at  three  and  one-third  cents,  I  would  say  that  a  quart 
of  milk  cannot  be  produced  on  the  farm  and  delivered  to  the 
creamery  (milk  that  would  suit  the  requirements  of  the  New 
York  Board  of  Health)  for  less  than  five  cents  a  quart  in  the 
winter  months.  Four  cents  would  be  a  good  price  'just  to  let  a 
man  out  if  he  got  that  during  the  summer  months.  The  last 
meeting  in  November,  the  price  was  raised  to  the  producer  one- 
fourth  cent.  The  only  comment  I  have  to  make  on  the  fact  that 
the  farmer  gets  three  and  one-  third  cents  a  quart  and  the  con- 
sumer pays  nine  cents,  and  the  fact  that  the  middle  man  or  dealer 
gets  five  and  two-thirds  cents  a  guart  for  taking  it  from  the  farmer 
to  the  consumer,  is  that  there  is  a  large  item  of  expense  that  the 
outside  people  do  not  appreciate  and  that  the  dealers  are  under; 
there  is  considerable  expense  in  handling  the  milk,  and  it  does 
cost  money  there  is  no  doubt.  What  it  is  I  am  unprepared  to  say, 
but  I  do  honestly  believe  that  there  is  a  very  great  expense  from 
the  time  the  milk  leaves  the  farmer  until  it  is  turned  over  to  the 
consumer.  No  doubt  about  it. 

(See  list  of  questions  and  answers  submitted  to  Young  attached 
to  his  testimony  for  full  report.) 


No.  45.]  107 

HENRY  ARNSTEIN  : 

I  reside  at  147  West  lllth  street  and  am  branch  manager  of 
the  Mutual  Milk  and  Cream  Company  at  214  East  22d  street  and 
have  been  in  that  position  since  the  1st  of  May,  1909.  I  was  col- 
lector for  the  Mutual  Milk  and  Cream  Company  previous  to  that. 
I  was  in  that  capacity  six  years  ago  last  May  2d  —  I  sold  out  to 
them  at  that  time.  I  have  been  a  director,  I  believe,  for  four 
or  five  years  but  am  not  one  at  the  present  time.  I  am  on  the 
executive  board.  At  the  meetings  of  the  executive  committee, 
which  are  held  every  Friday  at  three  o'clock,  we  simply  meet  and 
questions  of  business  come  up  from  time  to  time.  As  to  my  be- 
coming a  member  of  the  Milk  Dealers  Protective  Association,  I 
would  say  that  one  day  Mr.  Bleffort  came  up  there  and  he  says, 
"  See  here,  it  is  a  wonder  you  wouldn't  join  OUT  association,  you 
have  got  so  many  cans  flying  around."  Every  day  when  we 
shipped  our  empties  we  were  short  of  cans  most  of  the  time.  He 
said,  "  Come  down  and  see  yourself."  I  says,  "  Go  ahead  and  just 
propose  me  and  I  will  join  you."  Then  I  notified  Mr.  Cavanaugh 
about  this  thing,  I  told  him  that  I  was  going  to  belong  to  it.  He 
even  never  knew  it  until  I  told  him.  Mr.  Cavanaugh  says,  "  Oh, 
you  haven't  got  time  to  attend  to  that."  I  says,  "  You  will  see, 
your  cans  flying  all  around,  it  is  wise  to  belong  to  it."  He 
didn't  say  "  Yes,"  or  "  No,"  and  I  paid  the  $25  myself.  Bye 
and  bye,  I  told  him  I  was  a  member.  He  says,  "  Well,  I  will 
reimburse  you  —  I  will  give  you  that  $25."  Well,  I  says,  "  You 
have  got  more  cans  back  today  than  your  $25.00  amounts  to." 
They  bring  us  back  as  high  as  fifteen  or  twenty  cans  a  day.  Well, 
things  ran  along  and  one  day  I  came  after  that  meeting.  It 
was  quite  late,  probably  about  one-quarter  to  five  and  they  said 
they  had  passed  on  an  assessment  of  twenty-five  cents  each  mem- 
ber. •  "  Oh/'  I  says,  "  you  can't  do  that !  The  boss  wouldn't 
certainly  stand  for  that."  "  Well,"  he  says,  "  you  see  what  you 
benefit  by  it.  Your  company  is  getting  lots  of  cans."  So  when 
that  thing  was  all  over,  this  legislation  had  been  going  on  for  some 
time.  I  have  been  up  to  the  Legislature  myself  last  spring  to 
Albany.  Mr.  Scott  brought  in  a  bill  that  a  man  could  not  have 
a  libel  for  a  man  on  his  premises,  unless  it  was  done  in  his  own 


108  [SENATE 

county.  That  was  the  very  first  job  I  had  taken  to  the  Mutual 
Milk  and  Cream  Company  when  I  started.  There  was  a  delega- 
tion one  year,  I  should  say  about  eight  of  us  and  we  met  a  man 
at  Albany,  a  Mr.  Richardson.  He  drafted  this  bill  himself  some 
years  ago.  We  went  up  there  and  had  a  lengthy  discussion.  Sev- 
eral assemblymen  came  into  the  room.  Finally,  we  got  his 
answer  that  everything  was  satisfactory, —  that  the  law  would 
stay  the  same.  Well,  then  this  4  per  cent,  solid  matter  came  up 
as  you  probably  know,  that  this  shows  on  an  average  probably 
eleven  and  ninety  one  hundredths  and  the  State  gets  hold  of  a  case 
like  that  and  finds  a  sample  of  that  kind,  they  prosecute  you  for 
it,  even  if  the  milk  comes  as  it  did  from  the  cow.  They  thought 
they  wanted  some  legislation  on  it.  I  gave  my  $500 
to  Mr.  Wctterhahn.  I  did'  not  try  to  find  out  how  he  dis- 
bursed the  money.  I  didn't  know  that  a  portion  of  this  fund 
was  used  to  pay  the  losses  on  the  wagon  that  Bleffort  drove.  I 
don't  know  that  that  was  the  general  sense  of  the  old  member- 
ship of  this  association.  We  pay  our  collectors  more  than  we  pay 
the  association.  We  pay  Mr.  Walsh  fifteen  £ents  for  every  can 
he  brings  in  and  I  believe  he  gets  a  yearly  salary  besides.  Mr. 
Sam  Levy  is  a  member  of  the  association  and  Mr.  Wetterhahn. 
I  think  Mr.  Geier  is  the  head  of  the  West  Side  branch.  I  think 
Mr.  O'Xeil  is  connected  with  it.  Others  belonging  to  the  associa- 
tion that  I  know  of  are  Michaelson,  Steffans,  Martin,  Burlinson 
(he  belongs  to  the  Harlem  association),  Mr.  Gostly,  the  Tietjen 
Bros,  and  the  Beakes  Dairy  Co.  I  know  Mr.  O'Neil  and  Mr. 
Geier.  I  used  to  meet  them  nights  in  buying  the  milk.  I  don't 
know  whether  they  "represented  the  Milk  Dealers  Protective  As- 
sociation. I  have  known  Mr.  O'Neil  since  he  was  a  boy.  He 
was  in  the  milk  business  twenty-four  years.  I  resigned  from  the 
Milk  Dealers  Protective  Association  because  Mr.  Cavauaugh 
thought  I  was  attending  too  many  meetings  as  he  needed  me  in 
the  office  on  the  executive  board.  I  wrote  two  letters,  one -to  the 
Harlem  and  Bronx  Association  and  the  other  to  the  Milk  Dealers 
Protective  Association,  tendering  my  resignation.  In  regarding 
to  my  knowing  Miller  —  when  I  worked  on  103d  street  and  I 
lived  on  lllth  street,  and  when  I  was  a  collector,  I  used  to  walk 
down  to  business  every  morning,  and  kept  a  grocery  store  corner 


No.  45.]  109 

of  103d  street  and  Park  avenue.  Sam  Levy  used  to  sell  him  his 
milk  and  that  is  all  I  ever  heard  about  Miller  until  finally  I  read 
in  the  papers  that  he  had  gone  in  the  milk  business  and  Bleffort 
followed  him  up  with  the  dead  wagon.  That  is  all  I  know  about 
Miller.  I  have  200  shares  in  the  Mutual.  I  know  Mr.  Castely. 
I  don't  known  whether  he  has  $9,000  fund  in  his  possession.  I 
paid  my  $500  to  Mr.  Wetterhahii.  We  sold  milk  at  thirty-eight 
cents  a  can  above  exchange  price.  Mr.  Cavanaugh  either  'phoned 
or  gave  me  a  slip  of  paper  and  says  that  the  price  will  be  so  much 
on  such  and  such  a  day  and  I  put  out  the  price  on  our  black- 
board to  notify  the  drivers  to  inform  the  customers  that  com- 
mencing with  such  a  date,  the  price  will  be  so  much.  Our  price 
is  usually  thirty-eight  cents  above  exchange,  plus  freight. 

EGBERT  BRUCE  BAKER:  i 

I  reside  at  No.  509  West  One  Hundred  and  Seventy-third 
street.  I  am  in  the  milk  and  butter  business  for  forty  years.  I 
am  in  the  business  individually.  I  have  no  dairies  or  stations  in 
the  country,  and  have  not  had  any  for  eight  years.  My  main  store 
is  in  New  York  city,  No.  591  Second  avenue.  I  have  no  branch 
stores  at  the  present  time.  I  sell  all  my  milk  in  New  York  city. 
I  am  a  stockholder  of  the  Consolidated  Milk  Exchange,  but  was 
not  a  stockholder  of  the  Milk  Exchange  Limited.  I  have  never 
been  an  officer  or  director.  I  did  not  own  stock  in  Borden's  Con- 
densed Milk  Company,  Sheffield-Farms-Slasson-Decker  Company 
or  the  Mutual  Company.  I  have  attended  meetings  a  few  times 
of  the  stockholders  or  directors  of  the  Consolidated  Exchange.  I 
do  not  think  I  have  been  there  in  eight  years.  I  think  the  last 
meeting  was  held  at  No.  6  Harrison  street.  I  did  not  remember 
what  took  place  at  those  meetings. 

I  was  supposed  to  pay  certain  annual  dues  to  the  Consolidated 
Milk  Exchange  and  I  understood  that  they  were  to  pay  expenses, 
rent  of  rooms,  etc.  The  reason  I  bought  some  stock  at  that  time  — 
T  was  running  creameries,  and  I  thought  that  by  getting  ac- 
quainted I  might  be  able  to  place  some  of  my  milk  when  I  had  too 
much.  I  did  not  really  know  that  the  main  purpose  of  the  organi- 
zation was  to  fix  a  value  upon  milk.  I  take  the  Milk  Reporter 
and  I  see  that  it  says,  "  The  Exchange  made  such  a  price,"  I  con- 
sider that  the  official  paper  of  the  Exchange,  that  is  the  Exchange 


110  [SENATE 

price.     I  use  the  values  and  prices  that  I  find  in  the  Milk  Re- 
porter as  a  guide.     I  know  something  of  what  I  have  got  to  pay 
for  milk  when  I  see  that.     My  contracts  with  the  producers  are 
usually  verbal.     Sometimes  I  pay  five  to  ten  cents  more  than  the 
Exchange  price.     On  being  questioned  by  the  referee  the  witness 
testifies  that  this  price  which  is  five  to  ten  cents  above  the  Ex- 
change price  is  not  paid  directly  to  the  farmer.     It  is  paid  to  the 
creamery  whom  it  appears  the  witness  buys  his  milk  from  as. he 
does  not  buy  his  milk  directly  from  the  farmer.     I  think  there  is 
a  custom  in  the  country  for  milk  dealers  to  pay  the  exchange 
price  or  thereabouts.     I  do  not  know  whether  the  price  to  be 
charged  to  the  consumer  was  ever  fixed  by  agreement  among  the 
members  of  the  Consolidated  Milk  Exchange.     I  think  I  paid 
during  the  years  of  1907,  1908  and  1909,  substantially  the  prices 
quoted  by  the  Milk  Reporter  as  the  exchange  price,  plus  five  or 
ten  cents,  as  I  have  heretofore  testified.     I  think  in  1907  I  was 
buying  directly  from  the  farmer.    1  think  at  that  time  I  paid  very 
nearly  the  price  fixed  by  the  Milk  Exchange.     I  did  not  raise  the 
.price  on  November  first,  and  I  am  still  selling  at  eight  cents.    My 
trade  is  on  the  East  Side  among  the  poorer  people,  and  if  they 
keep  up  that  price  for  any  length  of  time  I  think  I  will  raise  also. 
I  think  I  will  be  able  to  make  ends  meet  over  the  winter.   I  would 
say  that  my  profit  is  pretty  small.     I  deal  in  dipped  milk  more 
than  in  bottled  milk.     I  charge  six  and  seven,  seven  cents  on  the 
the  route  and  six  cents  in  the  store.    I  did  not  raise  the  price,  but 
I  remember  that  some  of  the  dealers  raised  the  price  in  1907  to 
nine  cents.     I  did  not.     I  continued  in  the  milk  business  just  as  I 
have  for  the  last  forty  years,  and  I  have  made  a  living.     I  am  not 
connected  with  the  Consolidated  Mutual  Aid  Society  and  I  am  not 
a  member  of  the  Dairyman's  Manufacturing  Company  or  a  stock- 
holder.   At  one  time  I  was  in  a  way  concerned  with  the  company 
who  owned  the  stock,  but  I  never  owned  any  stock  individually.  I 
was  with  the  Tri-State  Dairy  Company  who  owned  some  stock  at 
that  time.     I  purchased  some  of  my  milk  of  Joseph  Laemmle  and 
some  of  the  Dairy  Products  Company.    I  buy  milk  already  bottled 
from  Laemmle.     I  furnish  the  bottles  and  he  charges  me  five  and 
a  quarter  cents  per  quart.     In  June  I  think  I  paid  him  in  the 
neighborhood  of  three  and  a  quarter  or  four  cents  per  quart.     All 


No.  45.]  Ill 

that  I  had  to  do  with  that  milk  that  I  received  from  Laemmle  was 
to  put  it  on  my  wagons  and  have  a  man  deliver  it  to  my  customers. 
Laemmle  did  not  deliver  the  milk  to  me.  I  had  to  get  it  from  the 
platform.  I  paid  the  freight  on  the  railroad.  That  is  in  addition 
to  the  price  I  paid  Laemmle.  I  think  1  paid  two  and  three-quarter 
cents  per  quart  for  the  loose  milk  and  I  paid  the  freight.  My  milk 
was  nearly  all  from  long  hauls  and  I  paid  the  railroads  about 
thirty-two  cents  a  can  or  nearly  a  cent  per  bottle  for  freight  in 
addition  to  what  I  paid  Laemmle.  By  a  long  haul  I  mean  beyond 
a  hundred  miles. 

DEALER. 

CHARLES  H.  C.  BEAKES  : 

I  reside  in  the  city  of  New  York  and  am  a  farmer  and  officer  of 
corporations  carrying  on  the  milk  business,  and  especially  am  I  an 
officer  of  the  Beakes  Dairy  Company,  of  which  I  am  president 
and  director.  I  have  been  in  the  milk  business  for  forty  years. 
Mr.  Alfred  Ely  of  No.  31  Nassau  street,  New  York  city,  appeared 
as  attorney  for  witness,  and  objected  and  contended  that  the  ex- 
amination should  be  confined  to  the  issue  raised  by  the  petition, 
and  further  made  the  specific  objection  that  the  issue  raised  is  that 
whether  on  November  1,  1909,  there  was  a  combination  and  an 
agreement  under  which  the  price  of  bottled  milk  was  raised  from 
8  cents  to  9  cents  a  quart. 

Objections  were  overruled  and  an  exception  taken. 

I  a rn  a  director  of  the  Beakes  Dairy  Company  and  the  Orange 
County  Milk  Association,  except  I  might  include  the  Consolidated 
Milk  Exchange.  The  Consolidated  Milk  Exchange  is  not  en- 
gaged in  buying  or  selling  milk,  to  my  knowledge,  and  I  think  it 
has  not  been.  Beakes  Dairy  Company  is  a  New  York  corporation 
with  a  capitalization  of  $100,000. 

Objected  to  by  Mr.  Ely  on  the  ground  that  the  financial  ques- 
tions cannot  be  made  a  subject  of  this  inquiry. 

I  own  $62,000  of  the  stock  of  the  Beakes  Dairy  Company. 

Several  objections  by  Mr.  Ely  and  overruled  by  the  referee. 

I  am  not  a  stockholder  in  any  other  corporations  except  those  I 
have  mentioned,  and  I  think  I  have  sixty-one  shares  in  the  Con- 
solidated Milk  Exchange,  and  I  do  not  know  that  I  am  the  largest 


112  [SENATE 

stockholder.  1  was  a  member,  officer  and  director  of  the  Milk 
Exchange  Limited. 

Objection  by  Mr.  Ely  that  the  questions  are  answered  under 
protest  of  witness  as  to  the  jurisdiction  of  the  court,  and  especially 
with  reference  to  all  questions  relating  to  the  Milk  Exchange 
Limited,  which  ceased  to  exist  iifteen  or  sixteen  years  ago. 

The  Milk  Exchange  Limited,  a  'New  York  corporation,  was 
organized  in  1882,  as  far  as  1  can  recollect,  and  did  business  in 
New  York  from  1882  to  1895,  and  had  an  office  at  No.  G  Harrison 
street,  borough  of  Manhattan,  city  of  New  York,  and  held  meet- 
ings there  laterally.  I  don't  remember  exactly  when.  1  do  re- 
member that  in  1891  the  Attorney-General  brought  an  action  to 
dissolve  the  Milk  Exchange  Limited,  but  don't  remember  the  result 
of  it. 

Objection  by  Mr.  Ely  that  the  proper  way  to  prove  the  organi- 
zation and  dissolution  of  the  Milk  Exchange  Limited  is  to  produce 
the  official  record. 

Witness  permitted  to  state  whatever  he  knows  about  it. 

After  the  action  was  brought  for  the  dissolution  of  the  Milk 
Exchange  Limited  I  and  others  organized  the  Consolidated  Milk 
Exchange.  I  don't  remember  that  they  were  about  the  same 
parties  in  the  Consolidated  Milk  Exchange;  they  were  connected 
with  the  Milk  Exchange.  I  do  remember  that  some  of  the  Con- 
solidated Milk  Exchange  people  were  formerly  connected  with  the 
M.ilk  Exchange  Limited.  I  do  not  know  what  percentage,  and  do 
not  know  who  the  organizers  of  the  Consolidated  Milk  Exchange 
were,  but  I  might  have  known  at  the  time.  I  think  Mr.  McBride 
was  one  of  them.  I  do  not  recall  who  subscribed  for  the  stock  of 
the  Consolidated.  Mr.  W.  A.  Wright  was  the  first  president. 
Many  of  the  members  of  the  Milk  Exchange  Limited  became  stock- 
holders of  the  Consolidated  Milk  Exchange.  I  don't  own,  nor 
does  any  of  my  family  own,  any  stock  in  the  Borden's  Condensed 
Milk  Company,  Sheffield  Farms-Slawson-Decker  Company  or  the 
Mutual  Cream  and  Milk  Company.  From  1895  the  directors  of 
the  Consolidated  Milk  Exchange  met  at  No.  76  Montgomery 
street,  Jersey  City,  up  to  1900,  I  think,  and -then  they  met  at  No. 
P>57  Warren  street,  and  since  then  at  No.  6  Harrison  street,  New 
York.  I  have  been  a  director  ever  since  its  incorporation  and  have, 


No.  45.]  113 

as  regularly  as  I  could,  attended  the  meetings.  I  think  the 
directors  began  to  hold  their  meetings  at  No.  6  Harrison  street 
immediately  after  incorporation  or  very  soon  thereafter.  The 
business  of  the  Consolidated  Milk  Exchange  was  looking  after 
everything  that  pertains  to  the  milk  business  in  a  general  way. 

Q.  The  Consolidated  Milk  Exchange  has  a  capital  stock,  has 
it  not? 

Objected  to  and  objection  overruled. 

The  business  of  the  Consolidated  Milk  Exchange  was  the  gather- 
ing of  all  information  we  got  in  regard  to  the  production  of  milk, 
and  it  has  a  capital  stock  of  $1,500  divided  into  shares  of  $2>5 
each,  but  has  been  reduced  to  $2  each,  and  I  hold  sixty-one  or 
sixty-three  of  the  $2  shares  out  of  the  750  shares  of  the  corpo- 
ration. The  stockholders  pay  annual  dues  of  $2.  The  directors 
do  not  fix  the  price  to  be  paid  by  members  of  the  Consolidated 
Milk  Exchange  to  producers.  They  never  pass  upon  the  amount 
that  is  to  be  paid.  I  know  a  newspaper  called  the  Milk  Re- 
porter. I  do  not  know  that  the  Milk  Reporter,  a  newspaper,  pub- 
lishes the  exchange  prices.  I  see  the  values  as  expressed  in  the 
Milk  Reporter.  I  don't  know  where  they  get  the  prices  from. 
These  prices  are  not  sent  by  the  board  to  the  Milk  Reporter,  but 
I  do  say  that  the  prices  are  not  fixed  by  the  board  of  directors. 
The  prices  shown  in  the  Milk  Reporter  are  not  fixed  by  the 
directors. 

Q.  Now,  what,  if  anything,  did  you  have  to  do  with  these 
prices?  A.  The  exchange  may  have  expressed  its  judgment  as 
to  the  value  of  milk,  and  its  judgment  may  have  been  identical 
with  these  prices. 

The  board  of  directors  expresses  its  judgment  as  to  the  value 
of  milk  by  resolution.  I  have  not  got  the  minute  book  of  the 
board  of  directors  of  the  Consolidated  Milk  Exchange.  Mir. 
Laemmle,  the  secretary,  will  undoubtedly  produce  the  books. 

No  member  of  the  Consolidated  Milk  Exchange,  discussed  with 
me  taking  up  the  matter  of  the  campaign  of  education  of  milk. 

Witness  by  advice  of  counsel  declined  to  sign  his  name  and 
on  objection  by  Mr.  Ely  was  excused. 

The  same  ruling,  on  witness  being  requested  to  write  Beakes 
Dairy  Company. 


114  [SENATE 

Witness  shown  a  paper. 

Q.  Did  you  write  the  words,  "  Standard  Dairy  Company  ?  " 
A.  Standard  Dairy? 

Q.  Beakes  Dairy  Company  ?     A.  Yes,  sir. 

And  that  is  my  handwriting.  Paper  was  signed  in  1909,  and 
the  paper  offered  in  evidence,  the  same  being  a  proposed  agree- 
ment to  be  circulated  among  milk  men  to  raise  a  contribution 
for  an  educational  campaign  in  the  columns  of  the  New  York 
Tribune,  a  newspaper,  wherein  the  milkmen  were  to  share  the  ex- 
pense, and  signed  only  by  said  two  parties.  The  date  of  the  paper 
was  May,  1908.  For  six  months  previous  to  May,  1908,  Mr. 
Gorman  had  been  around  proposing  to  do  certain  things  through 
the  newspaper.  Milk  was  being  maligned,  mothers  were  being 
frightened,  and  I  was  getting  ready  to  double  my  subscription, 
if  the  value  of  milk  as  a  food  product  could  be  put  before  the 
people  right.  The  papers  were  full  of  untrue  adverse  criticism 
on  milk  and  I  discussed  the  subject  many  times  with  Mr.  Gorman. 
The  price  was  nine  cents  when  I  discussed  it,  but  the  price  had 
nothing  to  do  with  it.  It  remained  at  nine  cents  from  October 
or  November,  1907,  until  April  1st  or  May  1st,  1908.  In  May, 
1908,  the  price  went  up  to  eight  cents,  bottled  milk,  and  this 
was  the  time  that  I  signed  the  above  paper.  I  signed  the  paper 
to  help  Mr.  Gorman  in  his  work.  I  never  gave  Mr.  Gorman  a 
ballot,  shown  me,  of  the  Consolidated  Milk  Exchange. 

Ballot  received  in  evidence  and  marked  Exhibit  B  for  indentifi- 
cation. 

I  have  seen  the  paper,  and  the  letters  of  the  alphabet  on  it  are 
in  my  handwriting.  Mr.  Gorman  brought  the  paper  to  my  office 
in  the  winter  and  wanted  to  get  each  dealer  to  sign  it,  and  I  did 
so  thinking  it  would  help  him.  There  are  some  names  on  the 
paper  of  members  of  the  Consolidated  Milk  Exchange,  Some  of 
the  milk  companies,  while  not  members  themselves,  their  offi- 
cers are  members  of  the  Consolidated  Milk  Exchange.  I  am  an 
officer  of  the  Beakes  Dairy  Company  and  also  an  officer  of  the 
exchange.  I  don't  know  how  many  other  companies  are  similarly 
situated.  List  of  the  members  of  the  Consolidated  Milk  Ex- 
change marked  Exhibit  2  in  evidence. 


No.  45.]  115 

These  different  letters  represent  that  different  ones  would  be 
better  able  to  pay  different  sums  to  the  campaign  of  education; 
Sheffield's  a  little  than  Borden's,  and  so  on.  It  was  a  classifica- 
tion of  dealers  as  to  the  amount  of  business  they  were  doing.  I 
don't  think  I  said  anything  to  Mr.  Gorman  about  educating  the 
public  up  to  the  idea  of  paying  more  for  milk.  I  don't  remember 
of  ever  having  talked  this  over  with  other  members  of  the  ex- 
change. If  the  public  understood  the  value  of  milk  as  a  food 
they  would  use  more  of  it.  It  is  the  third  cheapest  food  today, 
and  I  was  willing  to  pay  a  hundred  dollars  as  my  share  in  ac- 
quainting the  public  with  the  value  of  milk  as  a  food,  and  I 
thought  the  campaign  would  increase  the  demand  for  milk  25 
per  cent.  Mr.  Gorman  came  to  me  and  asked  when  the  exchange 
would  meet,  and  if  he  could  present  the  matter  to  them.  I  told 
him  to  come  down  and  I  would  ask  the  directors.  He  came  down 
to  6  Harrison  street  where  the  exchange  holds  meetings,  and 
I  think  what  he  had  to  say  was  very  unsatisfactory  to  them.  Ex- 
hibit 1  was  signed  in  May,  1909.  Milk  was  eight  cents  a  quart 
then.  The  directors  hold  meetings  sometimes  three  and  four 
times  a  month.  I  attended  regular  meetings.  They  are  usually 
held  at  6  Harrison  street ;  probably  three  or  four  meetings  a  year 
are  held  in  Jersey  City.  The  minutes  are  written  out  from  the 
memory  of  the  secretary.  The  board  of  directors  give  their  judg- 
ment on  what  the  value  of  milk  is.  The  resolution  is  the  result 
of  a  general  discussion,  taking  into  account  the  conditions  in  all 
sections  of  the  country,  and  the  estimate  of  value  is  for  the  day 
on  which  it  is  made.  The  Milk  Reporter  gives  the  price  per 
quart,  while  the  exchange  arrives  at  value  per  can.  I  don't  think 
any  of  the  members  send  the  notice  to  the  Milk  Reporter.  Be- 
fore arriving  at  the  value  of  milk,  the  exchange  takes  into  ac- 
count the  conditions  in  the  country,  whether  the  supply  was  ex- 
cessive or  short,  and  the  manufacturing  basis,  the  selling  basis, 
and  everything  that  went  to  make  up  the  value  of  milk. 

Q.  What  was  the  object  of  the  Board  of  Directors  of  the  Milk 
Exchange  giving  their  judgment  as  .to  the  value?  A.  That  there 
might  be  an  intelligent  expression  of  the  judgment  of  the  direc- 
tors a,s  to  the  value  of  milk,  and  it  was  not  merely  the  intention 
that  this  resolution  should  be  communicated  to  the  stockholders. 


116  [SENATE 

I  do  not  know  that  I  could  specify  their  intention  any  further 
than  "  the  meeting  had  made  an  accurate  and  intelligent,  tangi- 
ble, expression  of  value,  that  everybody  could  use  that  wanted 
to."  Any  one  could  ask  us  and  we  would  tell  them.  Reporters 
frequently  inquired.  The  members-  of  the  Exchange  paid  dif- 
ferent prices  and  were  not  controlled  by  the  Exchange  price.  The 
Beakes  Dairy  Company  in  pricing,  followed  the  Milk  Exchange 
price  "  to  a  degree."  In  some  counties  I  paid  more  and  in  some 
less,  depending  on  local  conditions.  I  have  a  large  acquaintance 
among  the  members.  All  the  members  of  the  Exchange  do  not 
follow  Exchange  prices.  We  make  the  value  subject  to  freight 
charges,  etc.,  and  the  price  mentioned  in  the  "  Milk  Reporter  " 
is  a  net  price,  and  charges  and  everything  had  been  taken  off. 
The  value  expressed  by  the  Exchange  is  the  value  of  milk  at  the 
depots  in  Kew  York.  Value  and  price  are  not  synonymous 
words.  The  Exchange  has  nothing  to  do  with  the  selling  or 
buying.  The  prices  shown  in  the  "  Milk  Reporter "  and  made 
exhibits  may  be  the  same  as  the  values  expressed  by  the  Ex- 
change, with  whatever  deductions  are  to  be  made  for  freight 
charges,  etc.  I  have'  Been  postal  cards  sent  out  by  the  "Milk 
lie-porter  "  to  subscribers,  giving  the  Exchange  value.  I  some- 
times pay  Borden's  prices.  The  members  made  no  effort  to  buy 
personally  at  Exchange  prices.  The  service  that  the  valuation 
gave  to  members  was  that  it  gave  them  an  intelligent  basis  as  to 
the  value  of  milk  at  the  time.  Years  ago  there  was  difficulty  to 
arrive  at  settlements  between  the  producers  and  dealers,  and  the 
value  fixed  by  the  Exchange  greatly  facilitated  that.  If  the  pro- 
ducers are  not  satisfied  with  the  value  fixed  by  the  Exchange, 
they  sell  to  somebody  else.  All  the  me nibers  have  not  the  same 
opinion  as  to  the  value  and  they  buy  at  different  prices.  There 
is  the  hardest  competition  between  the  members  that  you  can  con- 
ceive. Many  think  the  expression  of  value  is  useless,  :but  I  elon't; 
because  I  think  it  gives  an  intelligent,  tangible  expression  of  the 
value  of  milk  at  the  time,  and  this  expression  "  is  valuable  to 
everybody  that  gets  it  just  to  that  degree."  The  public  has  con- 
fielence  in  it  because  of  the  'accuracy  of  the  judgment  of  values 
of  the  directors  for  fifteen  years.  The  directors  elo  not  make  the 
price  in  the  interest  of  the  dealers.  There  is  no  agreement  not 


STo.  45.]  117 

to  bid  against  each  other  in  the  market,  and  no  presumption  that 
they  will  follow  Exchange  prices.  The  Milk  Exchange  Limited 
is  different  in  some  respects  from  the  Consolidated.  The  stock- 
holders of  the  old  Milk  Exchange  did  not  always  follow  the  price 
fixed  by  the  Board.  There  was  nothing  to  prevent  a  man  paying 
any  price  he  could  get  it  for.  The  old  Exchange  declared  a  price 
and  issued  their  card.  They  sold  milk  on  a  commission  basis. 
The  old  Exchange  made  a  price  and  issued  a  card  to  the  public. 

Q.  Previous  to  November  1,  1909,  did  you  have  any  discus- 
sion with  any  other  milk  dealer  in  reference  to  raising  the  price 
of  bottled  milk?  A.  Yes. 

Q.  With  whom  did  you  discuss  it?  A.  Why  naturally,  when- 
ever two  or  three  dealers  were  together,  the  matter  was  discussed. 
I  don't  recall  with  whom. 

The  Consolidated  Milk  Exchange  passed  no  resolutions  on  this 
subject.  It  was  discussed  among  the  members,  but  not  among 
the  Board.  The  discussion  began  back  in  August,  when  the  prices 
began  to  go  up.  We  all  discussed  the  desirability  of  getting  more 
money  for  the  milk.  I  think  I  mentioned  to  Mr.  Blizzard  of 
Borden's,  when  I  was  selling  them  some  condensed.)  milk,  asking 
him,  "  Were  they  going  to  try  to  go  through  the  winter  on  eight- 
cent  milk  ?  "  He  said  they  had  not  taken  the  subject  up ;  and 
thought  it  was  going  to  be  pretty  hard.  It  was  a  matter  of  dis- 
cussion among  the  dealers  whenever  they  met.  The  Mutual  Aid 
is  a  partnership  carrying  on  the  insurance  business  of  dealers. 
Bordens  are  not  members.  I  don't  know  what  the  Mutual  is. 

In  the  summer  and  fall  of  1908,  the  average  price  per  hundred 
pounds  was  more  than  the  average  price  per  hundred  pounds  in 
3909.  The  price  to  the  consumer  does  not  drop  simultaneously 
with  the  falling  of  the  price  to  the  producer.  The  price  of  bottled 
milk  has  stood  uniform  ever  since  it  dropped  from  10  cents.  It 
has  been  ar  8  cents.  It  dropped  from  12  to  10,  and  from  10  to  8 
cents.  The  value  of  milk  runs  down  in  June  and  July  to  21/4 
and  2%  cents.  We  have  to  take  more  milk  than  we  want  in  the 
flush  season  in  order  to  have  enough  when  it  is  scarce,  in  January 
and  February.  In  the  flush  season  we  have  to  manufacture,  and 
always  at  a  loss.  The  Bordens  have  not  had  the  choice  of  the 
dairies.  There  is  a  variety  of  prices  all  the  time.*  I  decided  to 


118  [SEX ATE 

advance  the  price  when  I  heard  Bordeiis  had  put  up  the  price. 
Uy  drivers  brought  in  word  on  the  29th  of  October,  I  think.  I 
put  out  my  notices  at  once.  I  did  not  know  Bordens  were  going 
to  advance  the  price.  And  dipped  milk  was  advanced  to  7  cents 
about  the  same  time.  Dealers  deliver  dipped  milk  to  the  door 
for  8  cents.  Before  November  1st  it  was  7  cents.  Store-keepers 
sell  dipped  milk  at  6  cents;  some  stores  sell  at  5  cents.  Generally, 
all  kinds  of  milk  were  advanced  November  1st,  by  dealer  to  con- 
sumer. "  The  advance  was  not  contemplated."  We  all  under- 
stood the  desirability  and  necessity  of  it.  "  For  instance,  I 
couldn't  advance  my  prices  unless  Borden  did ;  if  he  served  five 
families  in  a  house  and  I  served  five,  and  I  put  my  price  up  and 
he  stayed1  still,  I  would  lose  my  customers."  All  dealers  hoped 
that  the  price  would  go  up,  but  no  one  suggested  any  method  of 
putting  it  up,  nor  was  there  any  agreement  to  put  it  up.  When- 
ever we  discussed  it  we  talked  about  the  inability  of  dealers  to 
carry  on  the  business  unless  the  price  was  advanced.  There  was 
no  discussion  about  getting  together,  or  about  advancing  the  price 
at  the  same  time,  and  they  did  not  all  advance  at  the  same  time. 
In  some  instances  they  were  several  days  apart.  There  are  so 
many  dealers  that  no  one  could  tell  whether  they  would  all  go 
up  in  price.  If  they  all  put  it  up  at  the  same  time,  it  would  be 
all  right. 

Q.  And  discussing  it  was  a  method  of  bringing  this  about, 
was  it  not  ?  A.  No.  We  only  discussed  the  necessity  of  getting 
more  for  milk  if  we  were  to  stay  in  business.  I  couldn't  put 
my  price  up  unless  Bordens  did. 

There  was  necessity  for  concerted  action  if  the  price  was  to 
go  up.  Before  I  raised  it  I  told  no  member  of  the  Exchange  that 
I  was  going  to  raise  the  price  to  9  cents.  As  soon  as  my  drivers 
brought  word  that  Bordens  had  advanced  the  price  I  got  out 
my  notices. 


No.  45.] 


119 


EXHIBIT  10. 

SCHEDULE  OF  PRICES  PAID  TO  FARMERS  FOR  MILK  DURING  THE 
YEARS  1907,  1908,   1909. 


1908. 


1909. 


100  Ibs. 

Qt. 

100  Ibs. 

Qt.  T£ 

:;  100  ibs. 

'   Qt. 

January    .... 

1.67 

.  0367 

1.82 

.03931 

1.76 

.041 

February  .... 

1.53 

.03277 

1.74 

.03647 

1.73 

.03748 

March 

1.41 

.  03035 

1.60 

03426 

1   54 

'03652 

April   

1.39 

.03033 

1.37 

•  \J  *jil£i  \J 

.02>871 

-L  •  t^Tt 

1.33 

.03095 

Mav 

1.17 

.  02645 

1.09 

.02366 

1.08 

.02575 

June    .  . 

.99 

.02248 

.92 

.01991 

.90 

02144 

Julv  . 

1.10 

.0242 

1.05 

.  02241 

1.09 

•  V/'^'JLTtm 

.02697 

August  

•1.28 

.02906 

1.22 

.  02741 

1.25 

.03143 

September  .  .  . 

1.42 

.0317 

1.34 

.02900 

1.43 

.03557 

October   

1  .  72 

.0*3890' 

1  .  60 

.03678 

1.70 

.  04148 

November   .  .  . 

1.82 

.03931 

1.72 

.03848 

1.84 

.04301 

December    .  .  . 

1.82 

.03931 

1.77 

.03970 

1.91 

.  04547 

The  foregoing  prices  are  the  absolute  net  money  paid  to  the 
farmer  and  do  not  include  any  other  expenses,  such  as  cans  fur- 
nished to  the  farmer,  can  washing  or  any  other  expense  whatso- 
ever in  the  matter. 

The  exchange  does  not  try  to  promote  uniformity  in  the  price 
of  milk  paid  by  the  members  of  the  exchange  to  producers  nor  to 
sellers,  nor  to  consumers  either.  The  duties  of  the  legislative 
committee  were  to  look  after  legislation  affecting  milkmen.  Some 
small  portion  of  the  expense  of  the  committee's  work  at  Albany 
may  have  been  paid  by  parties  outside  the  exchange.  In  matters 
of  general  interest,  milkmen  in  general  frequently  contributed. 
The  reason  why  I  may  have  requested  a  special  meeting  of  the 
board  of  directors  of  the  exchange  was  "  because  of  the  changed 
conditions"  in  the  trade."  The  purpose  of  the  meetings  of  the 
board  was  to  obtain  an  accurate  expression  of  the  valuation,  an 
accurate  judgment  as  to  the  value  at  that  time  of  milk,  and  they 
had  to  keep  holding  meetings  if  they  expected  to  measure  it  cor- 
rectly, and  the  reason  the  directors  undertook  it  was  that  the 
market  might  be  accurately  gauged,  that  it  might  'be  before  the 
buyers  and  sellers,  an  accurate  gauge  of  the  value  of  milk  in 


120  [SEXATE 

this  market  under  the  conditions  existing.  In  making  the  con- 
tracts with  the  farmers  they  frequently  stipulate  "  that  they  want 
the  value  expressed  by  the  Exchange." 

Q.  Could  you  tell  me  what  proportion  of  your  agreements  with 
farmers  contained  that  stipulation?  A.  Well,  you  know  that  is 
only  for  the  milk  they  brought  me.  They  weren't  obliged  to 
bring  me  their  milk  the  second  day.  If  when  I  send  up  my  prices 
at  any'  time  they  were  not  satisfactory,  they  are  at  liberty  to 
quit  right  the  next  day  and  they  would  quit,  too,  if  they  were 
not  satisfactory. 

We  make  no  contracts,  and  I  can't  tell  what  percentage  of 
milk  is  bought  upon  exchange  prices.  We  have  simply  an  un- 
derstanding from  day  to  day.  We  probably  bought  none  at  ex- 
actly exchange  prices;  but  all  about  that  valuation.  In  making 
contracts  we  take  everything  into  account :  Borden's,  exchange 
prices,  manufacturing  price  and  everything  else  that  affects  the 
price.  I  don't  think  there  is  any  price  and  sales  committee  as 
provided  in  the  by-laws.  There  may  be  such  a  committee  men- 
tioned in  the  by-laws  and  minutes  and  I  think  it  is  a  mistake  to 
designate  a  committee  by  that  name.  The  minute  book  is  the 
only  record  we  have,  and  if  an  amendment  to  the  by-laws  is  not 
there,  I  do  not  know  where  to  find  it.  It  is  not  necessary  for  the 
board  to  act  upon  an  application  to  become  a  member.  I  never 
was  secretary  of  the  exchange,  and  I  do  not  know  that  minutes 
were  kept  prior  to  January,  1906,  but  I  presume  they  were;  but 
I  don't  know  anything  about  it.  I  am  under  the  impression  that 
Mr.  Walker  was  secretary  prior  to  Mr.  Laemmle.  The  dues  are 
paid  to  Mr.  Laemmle.  The  dues  are  $2  per  year.  I  became  a 
stockholder  at  the  incorporation  of  the  exchange.  The  by-laws 
call  for  appointing  certain  committees  and  they  are  appointed. 
They  are  sometimes  appointed  and  may  not  do  anything.  I  do 
not  know  what  I  called  on  Mr.  Alexander  Campbell  for  a  few 
weeks  ago,  except  about  the  buying  or  selling  milk.  We  had 
nothing  to  say  about  the  testimony  to  be  given  at  the  trial.  Mr. 
Campbell  did  not  say  anything  about  that  "  He  would  tell  the 
truth  at  this  inquiry."  I  have  bought  milk  from  him  on  many 
occasions  by  telephone.  I  have  heard  of  the  Milk  Dealers  Pro- 


No.  45.]  121 

tective  Association.  They  gather  cans  for  me.  I  think  I  paid 
them  about  seventy-five  dollars  last  year.  I  pay  on  the  basis  of 
cans  collected.  I  don't  know  whether  the  association  is  a  corpo- 
ration or  not.  I  never  attended  a  meeting.  I  may  have  at- 
tended meetings  once  a  year  for  the  past  eight  or  ten  years.  I 
have  heard  of  Mr.  Bleffort,  who  works  for  the  Milk  Dealers 
Protective  Association.  He  was  a  can  collecter.  I  think  Mr. 
Weatherhon  is  the  secretary.  I  never  heard  that  it  was  part  of 
the  object  of  the  Milk  Dealers  Association  to  harass  those  sell- 
ing milk  below  the  market.  I  did  try  to  buy  the  business  of  a 
dealer  who  was  selling  below  the  market. 

Q.  Now,  Mr.  Beakes,  did  you  yourself  in  any  way  ever  try  to 
influence  anybody  not  to  deliver  milk  to  a  dealer  who  was  selling 
below  the  market  ?  A.  On  one  occasion  I  may  have  told  a  cer- 
tain party  that  a  certain  man  was  cutting  the  market,  and  not  to 
give  him  any  more  milk  that  he  felt  he  ought  to. 

I  asked  the  Phoenix  Cheese  Company  to  do  this.  Miller  &  Co. 
was  the  party  that  I  directed  the  attention  of  the  Phoenix  Cheese 
Company  to.  I  learned  that  they  were  buying  milk  from  the 
Phoenix  Cheese  Company.  I  talked  the  matter  over  with  Mr. 
Carpenter,  and  told  him  what  they  were  doing  to  us.  I  told 
him  they  were  cutting  our  trade,  and  "  if  he  did  not  feel  obligated 
to  give  them  a  whole  lot  of  milk,  it  would  be  a  benefit  to  me." 
I  had  only  one  conversation  with  them.  I  may  have  spoken  to 
the  International  Milk  Company,  telling  them  that  the  Miller 
Brothers  were  taking  away  the  trade,  I  don't  know  to  whom  else 
I  may  have  spoken,  or  who  may  have  spoken  to  him  about  it. 
I  did  not  offer  Mr.  Carpenter  anything  if  he  would  cancel  the 
contract  with  the  Miller  Brothers.  Miller  is  not  a  member  of 
the  Consolidated  Milk  Exchange,  and  I  heard  that  Miller  said 
that  he  could  get  $1,500  if  the  contract  was  broken.  I  never 
had  any  conversation  with  Mr.  Campbell  as  to  what  testimony 
was  to  be  given  at  this  trial.  My  points  of  shipments  are  from 
Orange,  Delaware  and  Dutchess  counties.  I  ship  by  boat 
from  Newbnrgh,  and  so  does  E.  D.  Pierson.  The  freight  rate 
by  rail  from  that  point  is  twenty-six  cents.  We  pay  thirty-two 
cents  by  boat  and  they  pay  the  back  charges.  There  is  no  rebate 
from  the  boat.  The  back  charges  cover  the  cost  of  hauling  from 


12-2  [SENATE 

the  country  to  the  steamboat.  The  payments  to  the  Milk  Dealers 
Protective  Association  were  usually  made  over  the  counter; 
sometimes  in  checks.  I  haven't  got  the  receipts.  My  impres- 
sion is  that  assessments  are  made  whenever  the  association 
requires  money.  These  assessments  are  for  the  collection  of 
cans.  I  am  not  a  member  of  the  -association.  I  have  attended 
dinners  given  by  it,  and  acted  as  chairman.  I  have  22  creameries 
or  stations,  and  at  five  of  them  I  buy  on  exchange  prices,  and  five 
on  Borden's.  "  The  others  I  just  send  them  word  what  I  will  pay 
them  until  further  notice."  About  February  1st  I  reduced  the 
price  from  nine  to  eight  cents  to  a  small  extent,  but  did  not  ad- 
vertise it,  sooner  than  lose  our  customers.  At  one  creamery  I 
buy  on  the  butter  fat  test,  that  is  the  Babcock  test.  About  No- 
vember 9th  or  10th,  I  talked  on  the  'phone  with  Mr.  James  C. 
Ryder  of  Greenpoint,  about  an  advance  in  price  to  nine  cents.  "  I 
think  I  asked  him  if  they  had  gone  up  to  nine  cents."  He  said 
they  hadn't.  He  said :  "  I  went  up  two  years  ago  and  the  fel- 
lows roasted  me,  and  now  I  am  going  to  get  even.  I  am  going  to 
get  them  back."  I  dropped  it  there,  and  did  not  urge  him  to 
advance  the  price.  I  talked  with  Mr.  Wierck  many  times,  but 
don't  recall  whait  about.  Mr.  Wierck  never  told  me  he  was  going 
to  try  to  get  the  dealers  in  Williamsburgh  to  advance  the  price. 
I  never  had  any  conversation  with  Henry  Martin  of  the  Tioga 
Dairy  Compar.y  "  in  reference  to  a  meeting  held  over  in  Jersey 
City  between  myself,  Rogers,  president  of  Borden's,  and  Horton, 
president  of  the  Sheffield."  I  never  had  a  meeting  with  any  of 
these  men  to  talk  over  the  advance  in  price.  I  casually,  as  I 
met  different  milkmen,  talked  over  the  advisability  or  the  neces- 
sity of  raising  the  price  of  milk ;  and  all  these  conversations  took 
place  long  before  November  first. 

Q.  Do  the  members  of  the  Consolidated  bid  against  each  other 
for  milk  in  the  country  ?  A.  Oh,  yes. 

And  I  can  illustrate  it  in  this  way:  At  one  of  my  places  Mr. 
Slaughter  buys,  he  has  a  place  near  and  Mr.  Jordan  has  a  place 
near.  They  are  bidding  for  my  goods  all  the  time  and  I  for 
theirs.  Dairies  go  in  and  out.  Sometimes  they  have  them  and 
sometimes  I  have  them ;  and  in  the  city  "  they  are  selling  all 
through  one  another's  "  routes,  and  there  is  no  agreement  not  to 


No.  45.]  123 

invade  each  other's  territory  either  in  the  country  or  in  the  city. 
They  try  to  get  each  other's  business  away  from  them,  and  this 
applies  to  all  members  of  the  exchange.  Various  devices  are  re- 
sorted to  to  get  customers  away  from  each  other.  There  is  a 
general  competition,  not  only  among  members  of  the  trade  but 
between  all  dealers  in  the  milk  business,  and  there  is  not  and 
never  has  been  an  effort  to  partition  out  various  territories  to 
different  dealers.  The  difference  in  the  railroad  and  boat  rates 
from  Newburgh  is  represented  in  cartage,  trolley  charges,  to  the 
boat,  which  is  twelve  to  fifteen  miles. 

WILLIAM  H.  BENNETT: 

I  reside  at  Goshen  and  have  been  a  farmer  all  my  life.  In 
1860,  I  was  in  business  as  a  milk  dealer,  exclusive  of  milk  pro- 
ducing. I  was  in  Brooklyn  at  that  time.  My  farm  is  about 
sixty  miles  from  New  York.  I  am  a  member  of  the  Consolidated 
Milk  Exchange  and  have  five  shares  of  stock.  I  never  was  in  the 
old  exchange.  I  have  never  been  an  officer  or  director  of  the 
Milk  Exchange,  I  attended  the  first  meeting  of  the  stockholders 
of  the  Milk  Exchange.  I  sell  my  milk  at  the  present  time  to  the 
Howells  Condensed  Milk  Co.,  located  about  a  mile  from  me, 
and  sell  on  the  Milk  Exchange  price  and  have  sold  on  the 
Milk  Exchange  price  for  about  eight  or  ten  years.  I  make  my 
agreement  in  the  spring.  It  is  a  verbal  one.  Some  of  my  neigh- 
bors sell  at  the  exchange  price,  others  take  Borden's  price. 
Howell  always  gave  me  choice  between  exchange  and  Borden's 
price  until  last  year.  The  exchange  price  is  printed  in  the  coun- 
try papers.  They  average  about  the  same.  During  1909,  I 
averaged  about  ten  cans  a  day.  We  keep  about  50  cows  but  they 
are  not  all  milkers.  In  the  winter  time  it  costs  me  a  little  over 
one  and  one-quarter  cents  to  produce  a  quart  of  milk,  that  is,  for 
feed  alone;  that  does  not  include  any  other  expense.  It  costs  all 
of  three  and  one-fifth  to  three  and  two-fifths  cents  to  produce  a 
quart  of  milk  or  even  more  than  that,  I  think  in  order  to  make 
a  decent  living  and  to  make  a  reasonable  profit,  we  should  get 
three  cents  for  four  months,  four  cents  for  four  months  and  five 
cents  for  four  months;  that  is,  three  cents  for  May,  June,  July 
and  August ;  four  cents  for  March,  April,  September  and  October ; 


124 

and  five  cents  for  November,  December,  January  and  February. 
I  think  the  Milk  Exchange  as  it  is  at  present  operated,  is  beneficial 
to  the  producer,  because  in  a  great  many  months  we  have  had 
a  quarter  of  a  cent  extra,  and  some  months  a  half  a  cent  extra, 
once  in  a  while  a  month,  that  we  wouldn't  have  got  otherwise  if 
we  hadn't  had  a  director  for  to  help  us  out  because  many  a  time 
that  I  know  of  I  heard  from  my  director  home  that  one  vote  had 
carried  it ;  that  is  the  reason  that  I  think  that  we  have  gained  by 
the  Milk  Exchange.  I  don't  know  how  many  farmers  are  di- 
rectors of  the  Milk  Exchange.  Henry  Young  is  a  director.  I 
saw  a  separator  running  in  Howell's,  but  I  don't  know  why  they 
were  using  it.  I  don't  think  there  is  a  flush  of  milk  at  the  present 
time  in  my  locality,  and  I  know  nothing  about  milk  or  cream  being 
kept  for  any  length  of  time. 

DAVID  BLEIEE  : 

I  reside  at  1361  Madison  avenue.  We  are  bakers  and  milk 
dealers ;  have  been  in  business  about  thirty  years  under  a  partner- 
ship, Hirschman  &  Bleier.  The  other  partner  is  my  sister,  Mrs. 
Hirschman.  I  have  two  stations  located  at  Roxbury,  Delaware 
county,  and  one  at  Halcottville,  Delaware  county.  Our  main 
office  is  at  518  East  Seventy-second  street.  We  have  a  branch 
store  at  Lexington  avenue  and  Eightieth  street;  one  at  Eighty- 
eighth  street  near  Park  avenue;  one  at  Broadway  and  One  Hun- 
dredth street;  one  at  Columbus  avenue  and  Eighty-second  street; 
one  at  Park  avenue  and  Sixty-second  street ;  one  at  Avenue  C  near 
Fifth  street.  We  have  another  branch  for  summer  business  in 
Far  Rockaway.  I  think  I  was  a  member  of  the  Milk  Exchange 
Limited.  I  am  a  stockholder  in  the  Consolidated,  and  own  five 
shares.  I  have  never  been  an  officer  or  director.  I  do  not  own 
stock  in  Borden's,  Sheffield,  or  the  Mutual  Company,  and  was 
never  an  officer  or  director.  I  have  never  attended  meetings  of  the 
Consolidated.  I  have  been  in  the  room  attending  meetings  of  the 
Mutual  Aid  Society.  We  talked  over  nothing  but  fire  insurance. 
I  also  attended  meetings  of  the  Dairymen's  Manufacturing  Com- 
pany, held  at  6  Harrison  street.  I  am  a  stockholder.  I  have  never 
been  an  officer  or  director.  I  think  I  attended  one  meeting  of  the 
Consolidated  in  Jersey  City,  at  which  officers  were  elected.  That 


No.  45.]  125 

was  six  or  seven  years  ago.  The  Consolidated  does  not  deal  in 
milk.  I  don't  know  as  it  does  much  of  anything.  It  fixes  the 
value  to  the  farmer,  in  a  way.  They  simply  give  their  idea  of  the 
value  of  the  milk  to  the  farmer.  We  use  that  value  as  a  guide  in 
our  business.  We  use  it  as  a  basis.  We  buy  our  milk  on  the  cream 
test,  and  we  buy  milk  below  the  Milk  Exchange,  at  the  Milk  Ex- 
change price,  and  above  the  Milk  Exchange,  or  according  to  the 
amount  of  cream  there  is  in  it.  I  find  out  this  value  from  the  Milk 
Reporter.  I  'do  not  make  my  contract  with  the  producer  for  any 
specified  time.  We  don't  make  any  agreement  particularly;  we 
gauge  it  according  to  the  amount  of  cream.  We  test  the  milk  and 
pay  accordingly.  A  man  generally  comes  to  the  manager  and  tells 
him  he  wants  to  sell  his  milk,  and  the  manager  tells  him  to  bring 
it  on ;  he  brings  it  every  day,  and  then  at  the  end  of  the  month  he 
gets  paid  according  to  the  prevailing  price.  There  is  one  fact  I 
want  to  tell  you.  We  have  a  creamery  company  which  is  a  com- 
pany by  itself.  The  creamery  company  consists  of  Hirschman, 
Bleier  and  Kaetor  at  Roxbury.  At  some  times  the  partnership 
at  Roxbury  sells  to  others  besides  Hirschman  &  Bleier.  Kaetor 
is  dead,  and  his  son-in-law,  Ralph  V.  Ives,  conducts  his  part  of 
the  business  for  him.  I  am  acquainted  with  quite  a  num'ber  of 
the  members  of  the  Consolidated.  I  do  not  know  whether  there  is 
a  custom  among  them  to  raise  the  price.  I  never  discussed  that 
with  any  of  the  members  of  the  exchange.  I  can't  state  offhand 
the  average  monthly  prices  that  I  paid  to  the  producers  for  milk 
during  the  years  1907,  190S  and  1909.  On  an  average,  we  sell 
about  one  hundred  and  sixty  cases  of  twelve  bottles  each  per  day. 
I  sell  about  thirty  cans  of  forty  quarts  each  of  fluid  milk  per  day. 
1  raised  the  price  from  eight  to  nine  cents  about  the  fifth  or  sixth 
of  November.  My  canned  milk  is  almost  a  wholesale  trade.  My 
margin  is  twenty-eight  cents  above  cost  on  canned  milk.  That  is 
a  margin  on  what  the  milk  cost  me  to  Weehawken.  I  had  no  con- 
ference with  any  one  previous  to  November  1st  in  reference  to 
advancing  the  price  of  milk.  The  necessity  influenced  me  to  ad- 
vance the  price  of  milk  at  the  time  I  did,  the  increase  in  the  cost 
of  milk  and  other  incidental  expenses  which  are  connected  with 
our  business.  We  had  to  do  it  in  order  to  get  a  fair  margin  of 
profit.  I  was  also  influenced  by  the  fact  that  other  concerns  did  it 


126  [SEX ATE 

also.  I  never  knew  of  the  raise  in  price  until  one  of  my  drivers  in- 
formed me  of  Borden's  raise  on  the  1st.  Gorman  never  came  to 
me  in  reference  to  the  campaign  of  education.  Along  in  1906  and 
1907  I  raised  the  price  a  cent  a  quart,  from  8  to  9  cents, 
and  afterwards  reduced  it  to  8  cents.  I  also  advanced  the 
price  of  bottled  milk ;  we  did  it  because  the  others  did  it,  Borden 
and  Sheffield.  Borden's,  Sheffield,  "or  the  Mutual  Company  have 
no  interest  whatever  in  my  business.  I  received  twelve  or  fifteen 
postal  cards  from  the  Milk  Exchange,  showing  the  exchange  price 
or  value.  I  paid  no  attention  to  them.  If  you  are  looking  for  a 
trust,  I  want  to  tell  you  there  is  no  such  thing,  or  if  you  thinJv 
the  Milk  Exchange  regulates  the  price  to  the  consumer,  you  are 
entirely  wrong.  There  is  no  such  thing.  And  if  you  want  to  know 
what  the  milkman  ought  to  really  get  for  his  milk,  they  are  not 
getting  any  too  much  at  nine  cents  a  quart.  The  dearest  price  in 
the  year  is  through  the  winter,  and  we  need  that  nine  cents  and 
need  it  badly.  In  the  summer  time  when  milk  is  cheaper,  my 
business  is  cut  in  half.  The  people  go  away,  but  my  expenses  re- 
main with  me  entirely.  Everything  in  our  business  costs  us  a 
great  deal  more  than  it  did  before.  We  pay  75  per  cent,  more  for 
horses,  50  per  cent,  more  for  wagons,  and  twice  as  much  for  oats 
and  hay.  Our  help  costs  us  more  money. 

Statement  received  in  evidence,  marked  Exhibit  Xo.  11,  show- 
ing average  price  that  Mr.  Bleier  paid  for  milk  during  each  month 
of  the  years  1907,  1908  and  1909. 

(The  last  month  is  estimated.) 

ALEXANDER  CAMPBELL  : 

I  reside  in  Brooklyn  and  am  engaged  in  the  production  of 
milk.  I  am  also  president  of  the  Alexander  Campbell  Milk  Com- 
pany, a  Xew  York  State  corporation,  organized  in  1890';  first,  as 
the  New  York  Dairy  Company  in  1878.  Capital  stock  of 
$500,000,  of  which  I  own  over  $200,000.  The  officers  are,  Alex- 
ander C.  Campbell,  treasurer;  William  F.  Campbell,  vice-presi- 
dent; and  myself,  president.  Both  are  sons  of  mine,  The 
members  of  the  board  are  Alexander  Campbell,  John  Bingham, 
Erik  Logorquist,  William  F.  Campbell  and  Alexander  C.  Camp- 
bell, all  residing  in  Brooklyn,  except  John  Bingham,  who  resides 


No.  45.]  127 

» 

in    New    Jersey.      The    capital    stock   was    originally    $250,000. 
Stock    was    issued    for    property,    such    a,s    creameries    in    the 
countries,  horses,  wagons  and  machinery.     I  don't  know  as  there 
was   any  good  will  originally.     When  the  company  was  organ^- 
ized  it  was  composed  of  gentHemen  "  whose  object  at  the  time, 
and  whose  object  has  been  carried!  out  since,  was  to  improve  the 
condition  of  the  milk.     Among  those  who  were  —  a  number  of 
very  prominent  men  were  among  those  at  the  time,  such  men  as 
Drexler,   Morgan,  Drexler  &   Company,   Cornelius  R.  Wagner." 
They  were  simply  stockholders,     I  think  the  New  York  Dairy 
Company's  capitalization  was  $50,000.    The  business  was  divided 
between  New  York  and  Brooklyn,  and  I  think  the  capital  stock 
was  between  thirty  and  forty  thousand  dollars.     When  the  Alex- 
ander  Campbell  Milk  Company  was  organized  in  1890,  money 
wras  paid  in  by  degrees  until  the  entire  amount  of  $2'50,000'  — 
some  cash  and  some  property,  as  required  by  the  business  —  was 
turned  in.     I  have  been  in  the  milk  business  forty-five  years  in 
the  city  of  New  York  and  Brooklyn.     When  the  capital  stock 
was  increased  to  $500,000,  stock  was  sold  absolutely  for  money 
and  nothing  else, —  $2-50,000.     None  sold  for  less  than  $90.    We 
have  a  branch  office  in  Brooklyn,  one  in  Richmond  Hill  and  one 
at  Hempstead,  Long  Island.     We  have  creameries'  in  the  country 
in  Monroe,   Oxford  and  Orange  counties,  place  called  Boonville 
on  the  Central  ro-ad.     Our  Jersey  place  is  in  Hackettstown,  and 
Pennsylvania,  'Stirrucks,   and  we  have  just  taken  another   at  a 
pla.ce  near  Como,  Pennsylvania,  and  another  in  New  York  near 
Binghamton.    At  these  stations  we  receive  milk  from  the  stations, 
the  milk  is  transferred  to  our  Brooklyn  place  and  from  there  we 
ship  it  to  the  consumer.     Practically  all  our  milk  is  sold  in  the 
city  of  Brooklyn  in  bottles.     Nearly  all  the  milk  we  buy  of  the 
farmer  is  delivered  at  our  station.     We  always  pay  the  freight. 
What  we  pay  the  producer  appears  on  o<ur  books.     I  am  not  an 
officer,  director  or  stockholder  of  any  corporation  dealing  in  milk. 
I  own  a  few  shares  which  entitled  me  to  membership  in  the  Con- 
solidated Milk  Exchange.     The  dues  are  paid  by  the  company. 
I  never  attend  the  stockholders'  or  directors'  meetings  of  the  Ex- 
change.    I  never  was  an  officer  of  it  nor  was  I  ever  an  officer  or 
director  of  the  Milk  Exchange,   Limited.     I  have  been  at  the 


128  [SENATE 

Milk  Exchange,  6  Harrison  street,  in  the  last  ten  years.  "  I  can 
probably  explain  this  to  the  satisfaction  of  the  court  by  saying 
that  this  Consolidated  Exchange  is  what  I  call  a  lengthened 
shadow  of  an  old  committee  that  existed  about  thirty-five  years 
ago,  of  which  I  was  a  member.  That  committee  undertook 
through  the  necessities  of  conditions  to  meet  the  farmers  and  try 
and  arrive  at  the  values  of  milk  -from  season  to  season.  They 
were  not  an  organization;  they  were  just  a  few  of  the  dealers 
who  found  that  the  necessities  of  the  condition  of  things  abso- 
lutely required  something  of  that  kind,  and  an  effort  was  made 
by  this  committee,  at  times  with  the  farmers  and  striving  to 
arrive  at  what  could  be  paid,  what  would  be  considered  a  fair 
price  for  milk.  .  .  .  All  the  circumstances,  supply  and  de- 
mand, etc..  were  taken  into  account."  I  regard  the  Consolidated 
Exchange  as  a  continuation  of  that  same  body,  "  until  it  has  be- 
come a  sort  of  a  custom  to  meet,  I  suppose;  that  is,  the  way  of 
arriving  at  the  value  of  goods,  I  suppose,  and  in  some  way, 
making  it  known.  I  do  not  recall  them  now.  They  are  mostly 
dead.  My  impression  is  that  Johnny  McBride,  president  of  the 
Exchange,  was  one  of  that  committee.  This  committee  of  dealers 
simply  met  and  talked  the  matter  over  and  tried  to  arrive  at  the 
fair  value  of  milk  —  all  things  being  taken  into  account.  I  don't 
know  if  they  had  any  other  way  of  communicating  their  views 
to  the  public.  A  farmer  being  a  member  of  the  committee  might 
communicate  it  to  the  people  in  the  country.  The  members  were 
in  no  way  controlled  by  the  prices  fixed  by  that  committee.  The 
trouble  with  the  Consolidated  Exchange,  it  does  not  differentiate 
in  the  quality  of  milk.  I  don't  think  they  fix  the  price.  I  don't 
think  they  can  and  I  never  knew  them  to  be  able  to  successfully 
fix  any  price  for  milk."  The  price  fixed  by  the  committee  would 
not  be  controlling,  even  as  to  themselves.  I  think  that  my  com- 
pany has  not  one  contract  which  calls  for  a  higher  price  than 
that  established  contract  which  calls  for  a  higher  price  than  that 
established  by  the  Exchange.  The  committee  and  others  have 
to  go  out  and  do  the  best  they  can  with  the  farmer. 

Q.  What  is  your  idea  of  what  percentage  of  the  milk  available 
for  use  in  the  city  of  New  York  is  controlled  amongst  the  mem- 
bers and  dealers  of  the  Consolidated  Milk  Exchange,  A.  Xone 


No.  45.]  129 

of  it ;  absolutely  no  man  has  a  control  over  it.  Any  man  can  go 
behind  me  or  my  customers,  my  creameries  and  buy  the  cream, 
any  day  he  chooses  if  he  pays  more  money. 

1  have  been  at  the  rooms  of  the  Consolidated  Exchange  not  a 
dozen  times  in  twenty  years.  I  went  there  to  sell  out  a  business 
and  get  all  I  could  for  it.  I  have  seen  copies  of  the  "  Milk 
Reporter,"  and  I  believe  the  values  placed  by  the  Exchange  are 
quoted  there,  and  it  assists  me  to  a  degree  in  purchasing  milk, 
because  "  it  gives  me  an  idea  as  to  values.,"  and  I  simply  go  out 
among  the  farmers  and  present  these  figures  and  other  figures  — 
Borden's  and  others  —  and  make  the  best  prices  I  can.  The  only 
time  I  used  the  price  established  by  the  Milk  Exchange  was, 
"  when  it  came  near  the  value  of  goods  as  shown  what  they  were 
worth  in  other  lines  of  business  (butter  and  cheese).  '  I  don't 
think  any  committee  or  a  dozen  committees  can  change  the  value 
of  the  price  of  milk  not  a  hair's  breadth,  not  a  hair's  breadth." 
All  the  dealers  combined  cannot  control  the  fanners.  They  can 
churn  it  — the  dealers  can't,  it  doesn't  pay.  The  $500,000  of 
our  capital  stock  is  not  all  sold  —  one-half  of  it  is  7  per  cent 
preferred  stock  —  not  all  issued.  We  paid  7  per  cent,  on  at 
least  $150,000  of  our  preferred  stock,  I  think  for  ten  years.  We 
paid  8  per  cent,  on  the  common  stock,  except  in  bad  years.  There 
\vas  one  year  that  we  didn't  pay  8  per  cent,  on  the  common.  We 
never  paid  more.  We  probably  sell  1,000,000  quarts  in  a  month. 
I  cannot  tell  you  the  profit  on  a  quart.  Take  onerfourth  of  a  cent 
on7  and  it  would  bankrupt  the  company;  give  us  onerfourth  of  a 
cent  and  we  can  pay  the  legitimate  cost  on  the  investment,  the 
legitimate  interest.  I  was  not  an  incorporator  of  the  Consoli- 
dated Milk  Exchange,  but  came  in  afterward.  I  may  have  said 
to  a  dozen  people  that  the  Consolidated  Milk  Exchange  really 
had  no  mission  here,  simply  because  they  didn't  grade  the  goods, 
but  I  never  said  it  was  practically  a  continuation  of  the  Milk 
Exchange,  Limited.  I  had  a  conversation  with  Mr.  Gorman  and 
others.  I  didn't  waste  any  time  with  him.  I  ha.ve  no  stock  in 
the  Sheffield  or  Borden  companies.  Xo  one  notifies  me  what 
prices  are  arrived  at  by  the-  Exchange.  I  don't  know  what  the 
methods  were  of  communicating  what  the  Exchange  does.  I 
never  received  a  notice  from  the  Exchange,  except  of  annual 
5 


130  [SENATE 

meetings.  I  think  the  Milk  Exchange,  Limited,  had  some  way  o£ 
notifying  its  members.  I  think  we  get  the  "  Milk  Reporter  " — - 
someone  in  our  office  may  see  the  Exchange  prices  in  the  "  Milk 
Reporter."  We  make  contracts  for  a  definite  period  of  time  — 
sometimes  above  and  sometimes  below,  and  we  try  to  keep  as  low 
as  possible  —  same  as  other  people  do,  I  suppose.  We 
raised  the  price  from  eight  cents  to  nine  cents  about  the  ninth 
day.  I  think  I  knew  just  as  much  about  it  as  if  I  had  discussed 
it  with  all  the  Milk  Exchange  members.  It  was  a  natural  sub- 
ject to  bring  up  with  any  milkmen  because  of  the  great  necessity 
• — the  expense  of  delivery  under  the  existing  conditions  that  made 
it  absolutely  necessary  to  put  up  the  price  of  milk.  I  don't  know 
about  the  discussion  being  general  in  the  trade,  I  don't  remem- 
ber who  I  may  have  talked  it  over  with,  except  I  may  have  talked 
it  over  with  the  manager  of  the  Empire  'State  in  Brooklyn.  I 
think  his  name  was  Needner.  About  all  he  said  was  that  if  we 
had  to  pay  our  bills  as  we  were  in  the  habit  of  paying  we  would 
have  to  get  more  for  the  goods.  It  was  said  that  the  necessity 
warranted  it,  but  no  agreement  was  made  to  advance  it,  and  they 
advanced  it  a  week  or  two  before;  we  did.  I  never  agreed  with 
any  one  to  advance  the  price.  "  I  have  advanced  the  price  of 
milk  when  all  others  were  down,  and  I  think  I  am  able  to  do  it 
to-day  with  the  class  of  trade  that  we  serve  and  the  quality  of 
goods  that  we  put  out.  That  is  the  only  thing  we  rely  on,  and 
if  I  had  to  sell  milk  for  less  than  nine  cents  to-day  you  could  buy 
my  stock  veiry  low."  I  talked  about  rn^ilk  with  M>r.  Henry 
Beakes.  I  wanted  to  sell  more  milk  and  he  wanted  to  buy  it,  and 
I  succeeded  in  selling  him  some.  We  were  paying  M>  cent  a 
quart,  above  the  Exchange  price.  In  September,  this  contract  I 
show  you,  calls  for  $1.60  per  forty-quart  can  and  we  paid  the 
freight  in  addition  to  that — October,  $1.70.  I  don't  think  it 
was  above  the  average  quality.  We  were  under  contract  and  had 
to  pay  it.  We  sold  this  milk  at  less  than  contract  prices'.  In 
reference  to  price,  after  talking  over  the  conditions,  I  told  him 
that  we  would  have  to  have  more  money  for  our  goods. 

Q.  You  said  to  him  it  would  be  advisable  to  advance  the  price 
of  milk  ?  A.  I  may  have  said  that.  I  am  not  sure.  I  don't  know 
what  exact  language ;  it  was  in  the  air ;  it  was  in  our  conversation 


Xo.  45.]  131 

that  we  would  have  to  get  more  money.  He  said  he  could  not 
stay  in  business  unless  he  did.  We  came  to  no  agreement  about 
price,  This  was  in  October,  1909,  about  two  weeks  before  the 
first.  I  think  we  notified  our  customers  about,  November  9th  of 
the  advance  in  price.  I  may  have  said  that  I  didn't  think  the  ex- 
change was  doing  any  good  in  the  milk  business.  I  didn't  say  that 
the  Consolidated  was  doing  substantially  the  same  as  the  Exchange, 
Limited,  because  I  didn't  know  anything  about  the  Limited.  The 
newspapers  know  nothing  about  the  milk  business1.  They  say  in 
one  column  that  we  are  charging  too  much  —  and  in  another  "  that 
the  babies  of  the  city  are  dying  from  uncured  milk."  If  they 
would  study  the  matter,  the  papers  could  do  the  community  good. 
If  the  papers  would  investigate,  they  could  do  the  community  a 
lot  of  good.  Milk  is  being  sold  today  at  a  loss.  Milk  is  brought 
in  here  from  400  miles  in  a  bottle  and  they  distribute  it,  put  it  on 
a  wagon,  and  that  wagon  has  to  go  from  two. o'clock  in  the  morning 
to  twelve  o'clock  to  distribute  the  milk  over  sixteen  miles  of  route, 
and  he  distributes  on  an  average  170  quarts  per  day  per  man  and 
wagon,  and  no  dealers  from  the  first  day  of  December  until  the 
first  day  of  April  can  pay  their  expenses  out  of  the  business,  but 
the  summer  months  they  make  profits  to  overbalance  the  loss  in 
winter.  In  the  month  of  June  milk  is  two  and  one-half  cents  or 
three  cents  a  quart,  and  we  are  obliged  to  take  from  the  farmers 
all  they  produce.  There  is  a  flush  of  milk  in  summer  just  when 
we  don't  want  all  of  it.  It  is  difficult  to  get  the  farmer  to  produce 
it  in  the  winter  when  we  want  it.  The  good  trade  leaves  the  city 
in  summer  when  there  is  plenty  of  milk;  thus  there  is  a  flush  or 
surplus  of  milk,  and  the  consequence  is  the  price  of  'butter  drops 
down.  I  have  seen  butter  at  eighteen  cents  a  pound  when  milk 
was  two  cents.  It  takes  ten  quarts  to  make  a  pound  of  butter. 
The  first  cost  in  the  country  is  twenty  cents,  and  after  you  have 
paid  all  the  expense  of  getting  it  to  the  city  and  manufacturing  it, 
you  get  eighteen  cents  for  what  originally  cost  you  twenty  cents. 
You  have  to  take  the  producer's  entire  outfit  in  order  to  have 
enough,  to  supply  the  demand  during  the  cold  weather.  We  paid 
8  per  cent,  on  our  common  and  7  per  cent,  on  our  preferred,  but  at 
the  same  time  we  went  to  the  bank  and  borrowed  $40,000  to  carry 
on  our  business.  I  may  have  had  some  talk  with  Mr.  Gorman  —  if 


132  [SENATE 

I  said  anything  to  him  it  was  if  we  advertise,  the  company  would 
do  it  over  its  own  name.  I  don't  think  he  said  that  it  was  to  be  a 
campaign  to  educate  the  people  to  higher  prices,  but  a  campaign  of 
education  "  as  to  the  quality  of  milk  and  the  necessity  of  the 
article  in  the  household."  Such  a  campaign  of  education  would 
increase  the  demand,  thus  the  dealer  would  be  interested  in  it. 
1  think  this  campaign  of  education  was  merely  a  matter  to  get 
some  commission  for  Mr.  Gorman.  I  don't  believe  in  advertising 
in  conjunction  with  others.  I  don't  think  Mr.  Gorman  said  any- 
thing about  the  amount.  Mr.  Gorman  said  nothing  to  me  about 
raising  the  price  of  milk.  He  talked  about  ultimately  increasing 
the  demand  for  milk.  The  public  does  not  appreciate  the  value  of 
milk  u  if  there  is  one  article  in  this  world  that  goes  on  the  table 
that  they  don't  irive  any  attention  to  it  is  milk."  They  don't  ques- 
tion the  price  of  any  other  goods.  In  the  milk  business  there  in- 
quiry always  is,  "  \Vh;it  are  yon  charging?  "  Quality  has  nothing 
to  do  with  their  consideration.  I  am  amazed  that  the  mother-  <»t' 
Ihe  city  do  not  take  that  into  consideration,  and  the  consequence  is 
that  the  man  who  sells  a  »ood  quality  has  to  compete  with  a  man 
who  sells  something  that  is  absolutely  unfit  to  use.  The  Hoard 
of  Health  has  done  much  to  improve  the  quality  of  milk  and  it  has 
increased  the  expense  to  the  dealer.  Some  milk  is  dangerous.  I 
purchase  the  best  milk  I  can  <>ct,  and  I  did  it  when  I  started  with 
one  wagon  and  did  the  work  myself,  and  we  arc  running  l.">0 
wagons  today  and  arc  sell  ing  the  best  milk  that  is  produced  —  so 
are  some  others,  and  the  small  man  can't  compete  with  conditions 
that  are  existing  today.  He  has  to  get  it  wherever  he  can.  He 
doesn't  know  where  it  comes  from.  It  requires  large  capital.  The 
milk  business  is  improving  very  much.  The  milk  is  skimmed  lie- 
fore  it  is  shipped  to  the  city  in  some  cases.  Milk  is  one  of  the  first 
articles  that  the  public  economize  on.  The  reason  why  the  small 
dealer  has  got  to  go  is  because  he  doesn't  possess  facilities  for  tak- 
ing care  of  the  goods.  Years  ago,  there  was  no  municipal  or  State 
control.  The  producer  shipped  direct  to  individuals  —  a  man 
with  a  horse  and  wTagon.  All  kinds  of  milk  was  shipped  to  the 
city  and  delivered  in  all  kinds  of  ways,  and  the  farmer  took  his 
chances  in  getting  his  money.  Conditions  are  changed.  The  first 
creamery  for  bottled  milk  in  this  country  was  built  bv  the  Alex. 


Xo.  45.]  133 

Campbell  Milk  Co.,  arid  the  first  glass  bottle  used  for  milk 
was  put  out  by  myself,  and  the  glass  bottles  are  used  in  every 
civilized  country  today.  The  large  dealers  assure  the  farmers  a 
st'tfe  market  for  the  product.  I  don't  believe  there  was  a  dealer 
in  Xew  York  who  knew  what  the  other  was  going  to  do  about  the 
advance  in  the  price  on  November  first,  except  Borden.  Some- 
thing had  to  be  done  to  meet  actual  conditions  and  if  you  "  stop 
milk  for  forty-eight  hours,  there  would  be  a  revolution."  I  don't 
know  what  others  understood,  but  Borden's  price  had  nothing  to 
do  with  mine.  •  I  advance  the  price  when  I  have  to  and  I  believe 
that  intelligent  thinking  people  are  going  to  pay  for  a  safe  article. 
I  think  the  delivery  expense  is  2  or  3  cents  a  quart.  (This  state- 
ment corrected  later  to  read :  "  including  everything  and  its  dis- 
tribution, 4  3-8  cents  in  cool  weather  and  in  hot  weather  5  cents 
per  quart."  Itemized  statement: 

CENTS. 

Handling  in  the  country  creamery .375 

Freight  to  Jersey  City .  75  . 

Truckage  to  city  creamery .  375 

Bottling  and  pasteurizing .25 

(I  don't  think  that  is  quite  enough  for  that  item.   Maybe 
a  little  too  much  on  the  others.) 

Bottles  and  caps .25 

Ice  during  entire  handling .  375 

Delivery  to  trade .  .  2 . 00 


4.375 


I  wouldn't  take  all  the  wholesale  trade  in  "New  York  if  yon 
gave  it  to  me.  Freight  charges  and  handling  it  in  the  creamery, 
carting  it  from  the  terminals  to  distributing  points,  are  included 
in  the  three  cent  delivery  charges.  Milk  was  12  cents  during  the 
Civil  War,  finally  went  down  to  ten  cents  and  has  stood  at  eight 
cents  for  a  number  of  years.  All  things  considered,  it  will  cost 
six  cents  before  you  put  the  milk  on  the  wagon  at  the  distributing 
station  for  delivery  to  the  consumer,  and  one  wagon  can  deliver  on 
an  average  175  quarts  retail.  The  more  milk  you  serve  the  less 
it  costs  to  handle  it  in  the  retail  delivery.  I  believe  in  a  big 


134  [SENATE 

company  handling  it  then  you  get  milk  "  that  is  safe  to  be  sold; 
you  will  not  put  it  in  irresponsible  hands  and  you  will  get  it  for 
less  money."  My  milk  is  practically  all  bottle  milk.  We  bought 
the  business  of  the  Monroe  Dairy  Co.  I  think  they  owned  one 
share  in  the  Consolidated  Exchange*  and  we  got  it.  It  may  be 
that  my  company  owns  fifteen  .shares  of  stock  in  the  exchange. 
I  cannot  say  that  the  clipping  from  the  newspaper  which  you  show 
me  is  a  direct  account  of  the  earnings  of  my  company. 

(Pages  450  to  458  cover*  <1  l>y  M.  Scudder,  accountant,  financial 
report.) 

All  the  Milk  Exchange  members  would  be  unable  t<>  dictate 
price-  in  ths  country.  \Ye  pay  both  above  and  below  exchange 
prices.  I  would  <1<  scribe  the  exchange  as  a  body  of  men  who 
were  called  upon  to  appraise  milk  same  as  a  body  of  real  estate 
men  are  called  on  to  appraise  n  al  estate.  They  are  a  body  of 
men  who  understand  conditions  —  both  conditions,  both  the  pro- 
ducer and  dealer  —  Better  than  any  other  body  of  men.  I  am 
sure  that  they  only  come  to  an  understanding  after  going  over 
the  situation  what  milk  is  worth.  When  we  go  up  to  the  country 
and  offer  a  price  for  milk,  the  farmers  generally  tell  the  agent, 
"  We  would  rather  wait  until  we  see  what  figures  are  put  out  by 
some  of  the  other  companies.1'  I  do  not  think  the  exchange  ought 
to  exist  because  I  believe  the  price  ought  to  vary  as  the  quality  of 
milk  varies.  The  butter  fat  basis  is  the  only  basis  on  which  to 
buy  milk.  The  fixing  of  one  price  virtually  puts  a  premium  on 
a  poor  grade.  Butter  fat  is  the  only  test  of  value  but  in  feeding 
children  the  first  thing  is  to  have  the  milk  fresh.  "  The  whole 
thing  is  settled  before  the  Exchange  ever  reaches  it  or  gets  there." 
The  meetings  of  the  members  of  the  Exchange  and  the  fixing  of 
the  price  of  milk,  gives  the  farmer  an  idea  of  what  it  is  worth  and 
in  the  vicinity  of  what  he  may  expect  to  get  for  that  grade  of  milk 
-  namely,  the  ordinary  run  of  milk.  T  think  T  bring  in  about 
1,000  cans  a  day,  and  T  deliver  about  30,000  quarts  of  bottle  milk 
a  day.  The  rest  is  made  into  cream.  I  think  T  sell  about  1,000,- 
000  bottles  a  month.  The  price  made  by  the  Exchange  might  be 
regarded  as  an  official  price  for  certain  kinds  of  milk.  If  milk 
had  not  been  too  low,  an  advance  of  one  cent  per  quart  would  be 
too  much  of  an  advance.  "  We  would  be  making  too  much 


:NTo.  45.]  135 

money.77  We  would  make  our  dividends  in  three  months;  if  it 
goes  wrong,  we  can  lose  that  much  money  in  three  months.  We 
sold  milk  during  the  first  six  months  of  1909  and  made  $49,- 
000.  I  never  talked  with  anyone  about  what  testimony  was  to 
be  given  by  me  at  the  examination.  I  believe  that  the  average 
milk  wagon  delivers  less  than  200  bottles  per  day  in  New  York. 
The  reason  why  some  wagons  deliver  more  than  others  is  because 
the  customers  are  more  compact.  Where  a  large  dealer  can  de- 
liver 400  bottles  per  horse  and  wagon  the  profits  are  greater.  The 
$49,000  that  I  made  in  the  first  six  months  is  not  a  criterion  as 
to  the  net  result  at  the  end  of  the  year.  You  might  lose  it  all  in 
the  next  six  months.  To  show  the  difference  in  price  and  returns 
between  the  first  and  second  half  of  the  year,  I  submit  the  follow- 
ing: Beginning  after  June,  July  shows  a  profit,  $8,I5>53.53 ;  Au- 
gust, $4,300.81;  September,  $546.87,  while  October  shows  a  loss 
of  $1 0,169.87.  I  came  to  the  conclusion  that  if  our  people  wanted 
the  goods  that  we  were  selling  they  would  have  to  pay  nine  cents 
a  quart.  If  the  eight-cent  had  remained,  there  would  have  been  a 
deficiency  of  more  than  $3,400  in  November.  This  with  the 
shortage  of  October  would  have  wiped  out  the  profits  of  the  three 
preceding  months.  I  had  some  conversation  with  Mr.  Beakes 
about  purchasing  milk,  but  none  about  the  testimony  to  be  given. 
I  might  have  talked  about  the  price  of  milk,  but  never  about  an 
agreement  to  advance  it,  and  may  have  talked  about  the  desirabil- 
ity or  even  the  necessity  of  advancing  it.  I  don't  think  I  said 
that  I  felt  determined  to  advance  the  price  —  I  may  have  said 
that  I  felt  the  necessity  of  it.  I  have  collected  a  few  figures  show- 
ing the  comparative  cost  and  worth  of  milk  and  other  articles  of 
diet: 

1  Ib.  of  Steak,  costing $.22 

or  7  Eggs,  costing 30 

or  3  Ibs.  Blue  Fish,  costing 60 

or  3  Ibs  Oysters,  costing 1.29 

is  equal  in  food  value  to: 

1  qt.  of  Milk,  costing .09 

This  table  shows,  what  I  believe  is  fully  admitted,  that  milk  is 
our  cheapest  food.     When  the  expense  attending  its  production, 


136  [SENATE 

handling  and  delivery  are  taken  into  account,  it  is  manifestly  sel- 
ling below  its  intrinsic  worth.  And  its  price  must  bo  increased,, 
for  it  is  subject  to  the  same  economic  laws  that  govern  all  the  other- 
necessaries  of  life. 

The  following  statement  will  illustrate  how  every  requisite  for 
milk  supply  has  advanced  in  price  wi-thin  the  last  eight  years : 

I-  Percentage  of 

advance  in  & 
vears  omitting 
1901  1909  fractions 

Truck  horses,  average  cost $275  00  $375  00  36 

Delivery  Horses,  average  cost .        175   00  262  00  50 

Drivers'  wages 12  00  17  00  41 

Inspectors'  wages 15  00  19  00  27 

Truck  drivers 12  00  16  00  33 

Harness,  per  set 35  00  45  00  2£ 

Oats,  per  bushel 41  £  60  45 

Research  work 2,000  00 

Bottle  caps,  per  1,000 13  to  .14  .23  to  .50      77  to  2-55 

If  the  inquiry  is  carried  still  backward,  we  find  the  advance  in 
price  much  greater.  Fifteen  years  ago,  oats,  the  chief  feed  for 
horses  was  selling  at  thirty-three  cents  per  bushel.  Last  year  they 
reached  seventy.  Twenty  years  ago  the  feed  used  in  the  produc- 
tion of  milk  was  offered  at  $12.00  to  $14.00  per  ton.  Today  the 
same  feed  commands  from  $27.00  to  $35.00  per  ton. 

There  are  men  in  the  milk  business  that  bring  neither  knowl- 
edge, ability  or  capital  to  it.  They  get  milk  at  a  low  price  —  for 
quality  is  not  in  the  contract  —  -  and  this  so-called  milk  is  vended 
in  the  localities  where  cheapness  is  the  deciding  feature  and  clean- 
liness and  purity  are  unmeaning  terms.  Should  this  class  of 
dealers  be  obliged  to  compete  with  men  who  bring  their  experience 
and  expend  their  money  not  only  for  the  purpose  of  making  a 
financial  success  but  also  for  the  satisfaction  of  knowing  that  they 
have  contributed  to  the  health  of  the  community  whom  they  serve  ? 

LUTHER  L.  CAMPBELL: 

I  reside  at  2288  Broadway.  I  am  at  present  in 
the  milk  business,  and  have  been  for  nineteen  years, 
incorporated  under  the  name  of  the  Clover  Farms  Company;  in- 


>STO.  45.]  137 

corporated  under  New  York  laws.  I  am  president  of  the  com- 
pany. John  A.  Weissenfuh  is  secretary  and  treasurer  of  the 
company.  J.  P.  Smith  is  a  director.  He  lives  at  2290  Biroad- 
way.  I  own  two-thirds  of  the  capital  stock,  incorporated  at 
'$51,000.  The  stockholders  are  Weissenfuhm,  J.  P.  Smith,  Emile 
Guermonpez,  and  Mrs.  L.  L.  'Campbell.  We  have  not  paid  any 
dividends  in  the  past  three  or  four  years.  We  pay  about  $132 
per  week  in  salaries.  We  have  three  stations  in  the  country; 
one  is  Slate  Hill;  one  at  Shekomeks,  ~N.  Y.?  and  another  at 
Staatsburg.  Our  main  office  in  the  city  is  at  534  West  48th 
street.  We  have  a  branch  office  at  618  (East  or  West)  131st 
•street.  I  have  several  stores;  one  at  2288  Broadway;  one  <at  268 
Columbus  avenue;  one  at  85th  street  and  Columbus  avenue;  one 
at  912  Park  avenue;  one  at  827  6th  avenue;  at  1015  6th  avenue; 
152  East  86th  street;  100th  street  and  Broadway;  138th  street 
and  Broadway;  145th  street  and  Broadway;  17 9th  street  and 
Broadway;  182d  street  and  St.  Nicholas  avenue.  I  also  sell  in 
these  stores  butter,  eggs  and  jellies,  and  things  like  that.  I  only 
sell  in  New  York  state.  I  am  a  member  of  the  'Consolidated  -Milk 
Exchange,  owning  two  shares  of  stock.  I  have  never  been  an 
officer  or  director.  I  never  attended  any  meeting  of  the  stock- 
holders or  directors  of  the  consolidated.  All  the  reason  I  bought 
stock  in  the  Consolidated  Milk  Exchange  was  to  keep  in  touch 
Avith  the  trade.  I  can't  say  as  I  have  derived  any  benefit.  I 
'would  be  informed  of  the  value  arrived  at  by  the  consolidated 
through  the  Milk  Reporter,  and  a  postal  from  the  Milk  Reporter. 
It  has  never  been  of  any  particular  value  to  me,  unless  I  had 
more  milk  than  I  could  use  and  would  try  to  sell  it.  I  would 
nave  something  to  base  my  figure  upon.  I  have  had  both  written 
and  oral  contracts  with  the  farmers  from  whom  I  purchased 
ini]k.  Our  oral  contract  with  the  farmers  was  simply  »a  state- 
ment that  we  were  going  to  pay  such  and  such  a  price  and  if  they 
were  willing  to  accept  it  we  would  take  the  milk.  The  prices  that 
we  paid  were  the  regular  prices  that  we  got  from  the  Milk  Re- 
porter. We  would  not  pay  that  price,  but  we  based  our  price  on 
that.  Sometimes  above  and  sometimes  below.  The  milk  I  buy 
now  is  based  on  Borden's  prices.  I  think  Bordeii's  price  is  more 
generally  used  than  the  exchange  price,  at  present.  It  is  as  far 


138  [SENATE 

as  I  am  concerned.  The  prices  that  I  am  putting  out  now  at  the 
creameries  is  according  to  the  quality  of  the  milk  in  the  first 
place,  using  Borden's  price  as  a  basis.  We  pay  above  Borden'& 
prices  for  a  good  deal  of  our  milk,  but  the  exchange  at  the  present 
time  is  not  entering  into  it.  I  never  heard  that  the  board  of 
directors  of  the  consolidated  in  any  way  fixed  the  price  of  milk  to 
the  consumer.  I  raised  the  price  of  bottled  milk  from  eight  to 
nine  cents  a -quart  on  or  about  November  1,  1909.  I  do  not  sell 
dipped  milk.  I  am  serving  Dennett's  restaurant  at  wholesale* 
The  general  conditions  caused  me  to  raise  the  price.  I  knew  that 
we  would  lose  money  at  eight  cents;  that  is  the  principal  reason, 
jjordens  sent  out  a  notice  about  the  twenty-eighth  or  twenty-ninth 
of  October  to  the  effect  that  on  the  first  day  of  November  the 
price  of  bottled  milk  would  be  raised.  That  is  one  reason  why 
I  did  it.  I  have  discussed  the  desirability  of  raising  the  price  of 
milk,  not  only  with  my  own  firm,  but  with  other  people.  I 
can't  recollect  with  whom  I  talked.  I  did  not  enter  into  an  agree- 
ment with  any  person  whether  written  or  oral  to  raise  the  price. 
I  do  not  remember  about  the  campaign  to  educate  the  public 
into  paying  higher  prices;  although  it  seems  to  me  now  that  I 
heard  something  talked  about  getting  the  dealers'  side  of  the 
story  printed  in  the  papers.  The  milk  business  has  been  trampled 
on  by  a  lot  of  things.  Now  we  have  been  persecuted  from  alt 
hands.  They  had  the  people  so  frightened  that  they  did  not 
dare  to  use  milk.  It  was  to  eliminate  from  their  mind  that  they 
were  using  something  that  was  not  fit  to  use,  all  the  tuberculosis 
scare,  et  cetera.  People  were  'afraid  to  drink  milk.  If  my  mem- 
ory serves  me  right  it  was  not  to  raise  the  price.  I  am  a  stock- 
holder in  the  Dairymen's  Manufacturing  Company.  I  bring  be- 
tween 450  and  500  cans  containing  forty  quarts  each  to  the  city 
every  day.  I  do  not  belong  to  the  Milkmen's  Protective  Associa- 
tion. 

A  statement  received  in  evidence,  marked  exhibit  4-a,  show- 
ing the  prices  paid  for  milk  per  quart  during  the  various  months, 
covering  the  period  1908  to  1909: 

Dec.,       190!7 04  Jan.,       1908 04 

04  1/4  04  1/4 

.041/2  .041/2 


'No.  45.] 


139 


Jan.,   1908  

.03  1/2   Sept.,   1908. 

08  1/2 

March,  1908.  .  .  . 

.03  33/40   Oct.,   1908. 

0<3612 

.03  1/2 

04112 

.04  3/40 

....   .03  3/4 

.03  1/4 

08  1/2 

.08  1/2   Nov.,   1908'. 

040385 

April,  1908  

.03  2/5 

03  3/4 



.03 

04 

.03  1/4 

045385 

.0313/20 

03  3/4 

.03 

04 

.02  3/4 

.  ...   .08  1/2 

.08  1/2   Dec.,   1908. 

040385 

May,   1908  

.027625 

04 

.030125 

045385 

.02  3/4 

04 

.02  1/2 

08  1/2 

.02  1/4   Jan.,   1909. 

040385 

.08  1/2 

045385 

June,   1908  

.022125 

.  ..  .   .04 

.02 

03  3/4 

.08  1/2 

03  1/2 

July,   1908  

.0265     Feb.,   1909. 

040385 

.02  1/2 

0450385 

.  029 

03  3/4 

.02  1/4 

03  1/2 

.08  1/2 

03  1/4 

Aug.,   1908..... 

.0287 

08  1/2 



.03       March,  1909. 

036125 

.0312 

041125 

.02  3/4 

03  1/2 

.08  1/2 

.  ...   .03  1/4 

Sept.,   1908  

.03185 

08  1/2 

.03      April,  1909. 

031875 

.03  1/4 

036875 

.03685 

03 

.02  3/4 

02  3/4 

.03 

.08 

140 


[•SENATE 


May,       1909 


June,      1909 


July,       1909 


Aug.,      1909 


.02656 
.03156 
.02  1/2 
.02  1/4 
.08 

.02106 
.03156 
.02  1/2 
.02  1/4 
.08 
.0255 
.0305 
.02  3/4 
.02  1/2 
.08 

.028687 
.033687 
.03 

.03  1/4 
.02  3/4 


Aug., 
Sept. 


1909. 
1909 


Oct.,       1909 


Nov.,      1909 


Doc.,       1909 


.08 

.030812 

.035812 

.03  1/2 

.03  1/4 

.08 

.040375 

.045375 

.03  1/2 

.08 

.025 

.0475 

.03  3/4 

.04 

.08 

.04356 

.04856 

.03   3/4 

.04 

.08 


J.  G.  Walsh  collected  cans  for  me.  I  think  I  paid  him  ten  or 
fifteen  cents  per  can.  William  Schaus  also  collected.  Xo  one 
came  to  me  and  represented  himself  to  be  from  the  Milk  Dealers 
Protective  Association.  I  have  never  been  a  member  of  the  Milk 
Dealers  Protective  Association.  I  have  never  paid  any  money 
into  the  Protective  Association.  The  price,  eight  and  one-half 
cents  per  quart,  that  appears  on  the  statement  ib  what  I  received 
for  certified  milk.  That  is  milk  that  is  indorsed  by  the  County 
Medical  Society,  and  has  to  be  of  a  certain  standard  of  butter 
fat  and  stand  certain  bacterological  tests.  I  buy  the  certified 
milk  from  C.  W.  Knight  of  Rome,  X.  Y.  In  my  contract,  such 
as  I  brought  here,  at  the  present  time  I  fill  in  Borden's  prices. 
Last  year  it  was  Borden  prices  in  one  creamery  and  five  cents 
below  their  price  during  the  month  of  June  at  the  other  one. 


No.  45.]  141 

MANAGER  PHOENIX  .CHEESE   COMPANY. 
LINN  E.  CARPENTER: 

I  reside  at  108  North  Nineteenth  street,  East  Orange,  N.  J. 
My  principal  business  is  manager  of  the  P'hoenix  Cheese  Com- 
pany. The  Phoenix  Cheese  Company  is  a  corporation  engaged 
in  the  cheese  business.  The  legal  office  is  at  'South  Edmeston, 
N.  Y.  New  York  office  is  345  Greenwich  street.  Some  time,  I 
think  in  October,  I  made  a  contract  with  the  Harlem  Dairy  Com- 
pany. I  think  it  was  to  cover  until  April  1,  1910.  It  was  a  writ- 
ten contract.  By  that  contract  I  agreed  to  supply  Miller  with 
forty  to  sixty  cans  of  milk  each  day,  at  a  price.  A  Mr.  J.  Smith 
came  to  me  to  get  me  to  cancel  that  contract,  a  customer  whom 
we  are  now  serving  with  milk.  There  were  two  other  gentlemen 
with  Smith.  They  asked  me  if  I  was  selling  milk  to  the  Harlem 
Dairy  Company  and  I  told  them  that  I  was.  They  asked  me  if 
there  wasn't  any  way  that  I  could  stop  supplying  them  with  milk, 
and  I  said  to  them  that  I  couldn't  see  how  in  as  much  as  I  had 
a  contract  with  them,  and  they  said,  "  Why  contracts  are  easily 
broken."  I  said,  "  I  didn't  make  them  for  that  purpose."  "  Well, 
they  said,  we  could  ship  the  party  sour  milk  for  a  few  days  and 
he  would  not  want  any  more  milk."  I  immediately  told  them  I 
was  not  in  that  kind  of  business.  One  af  the  gentlemen  said. 
"  Well,  I  hope  I  am  not  misunderstood."  That  they  did  not  in- 
tend to  bring  anything  to  me  that  was  wrong;  that  they  knew  I 
was  a  square  man  but  they  wanted  a  square  deal.  Of  course,  I 
resented  the  statement  when  they  wanted  I  should  break  the  con- 
tract and  they  saw  the  force  of  their  argument  was.  gone,  and  they 
tried  to  make  amend  for  it.  I  told  them  that  if  the  gentlemen 
whom  we  were  selling  milk  to  was  selling  below  a  price  which  was 
was  profitable,  I  would  do  anything  that  was  just  and  reasonable 
in  my  power  to  see  if  I  could  prevail  upon  them  to  get  a  reason- 
able price  for  his  milk,  but  further  than  that  I  could  do  nothing. 
1  think  they  stated  to  me  that  Miller  or  the  Harlem  Dairy  Com- 
pany was  selling  below  the  Association  price.  I  never  saw  these 
gentlemen,  but  that  time.  Smith  called  upon  me  several  times. 
Smith  told  me  that  he  had  a  telephone  conversation  with  them. 
He  didn't  say  who,  and  said  that  they  were  prepared  to  offer  me 


142  [SENATE 

$1,500  for  that  contract  that  I  had  with  the  Harlem  Dairy  Com- 
pany. I  told  them  I  would  see  the  Harlem  Dairy  Company  and 
I  did.  They  sa^id  they  would  not  sell  it  under  any  circumstances 
or  any  consideration,  and  I  said,  "  Haven't  you  got  a  price  on 
which  you  would  sell  it  ?  "  They  said,  "  No."  They  said  they 
might  sell  their  business.  I  said,  "  Well,  what  would  you  take 
for  your  business  ?  "  If  I  remember  rightly,  they  said  $6,000. 
I  imparted  that  information  to  Mr.  Smith.  I  had  a  conversation 
with  Mr.  Beakes,  who  was  on  the  stand  to-day.  I  think  the  first 
conversation  was  over  the  phone.  Mr.  Beakes  called  me  up  and 
said,  "  These  fellows  have  asked  me  to  come  down  and  see  you 
in  regard  to  this  man  Miller.  He  is  doing  a  lot  of  mischief  up 
here  bothering  our  boys  to  beat  the  band.  They  say  you  have  got 
a  contract  with  them  but  it  seemed  to  pacify  them  a  little  if  I 
would  come  down  and  see  you."  I  said,  "  I  should  enjoy  having 
you  come  down  anyway,  if  you  care  to  come  down."  A  few  days 
later  he  called  me  again;  he  cjuiu'  down  that  afternoon  and  asked 
me  if  we  were  selling  milk  to  the  Harlem  Dairy  Company.  I 
said,  "  Yes."  Handed  out  the  contract  and  showed  it  to  him  - 
exactly  what  arrangement  we  had  made  with  them,  and  the  amount 
of  milk.  "  Well,"  he  says,  "  I  don't  see  but  what  you  will  have  to 
sell  them  the  milk,  Mr.  Carpenter."  I  said,  "  I  don't  see  any 
other  way,  Mr.  Beakes."  I  said,  "  You  understand,  do  yon,  that 
they  would  take  $6,000  for  their  business."  He  said,  "  Do  you 
know,  they  have  nothing  to  sell."  T  am  a  farmer  as  well  as  a 
milk  dealer.  I  have  no  figures  showing  the  cost  of  production  of 
a  quart  of  milk  throughout  the  year.  I  know  nothing  about  a 
price  established  by  the  members  of  the  Milk  Dealers  Protective 
Association.  I  never  had  but  one  written  contract.  My  concern 
sells  from  one  hundred  to  three  hundred  cans  of  milk  in  a  day.  I 
supply  different  dealers  and  when  I  found  the  condition  was  such 
that  I  had  to  advance  or  lower  my  price,  I  did  so.  I  think  the  ad- 
vancing or  lowering  of  the  price  was  governed  by  the  value  set 
upon  it  by  the  Exchange,  but  I  did  not  attempt  to  follow  implic- 
itly the  value  which  they  fixed  upon  milk.  I  have  sold  below  and 
above  their  price.  I  dare  say,  the  price  established  by  Borden's 
would  also  effect  the  price  at  which  I  sold.  I  can  give  you  what 
we  paid  for  milk  for  the  last  six  months  and  what  we  received  per 


45.]  143 

can  for  it.  All  are  f .  o.  b.  shipping  station.  And  further  I  wish 
to  state  that  in  these  figures  there  is  no  expense.  This  is  simply  the 
gross  profit  which  I  am  showing.  Loss  of  cans,  bad  debts  or  any 
expense  of  station  is  not  considered  in  any  way.  In  July  we  sold 
milk  from  our  shipping  station  at  $1.10.  We  paid  for  that  milk 
$1.10  a  hundred.  Profit  of  16%  cents  a  can.  In  August  paid 
$1.20  and  sold  it  for  $1.20  a  can,  or  a  profit  of  23  cents  a  can. 
In  September  we  paid  $1.40  and  sold  it  in  New  York  for  $1.45  or 
26  cents  per  can.  For  the  month  of  October  we  paid  $1.55  and 
sold  it  for  $1.75,  profit  of  6*4  cents  a  can.  For  month  of  Novem- 
ber we  paid  $1.85  and  sold  it  for  $1.65,  profit  of  12%  cents  a 
can.  For  month  of  December  paid  $1.90  and  sold  it  for  $1.75 
per  can  or  a  gross  profit  of  13 %  cents  a  can.  The  first  item  was 
the  price  per  hundred  pounds.  The  second  figure  was  the  price' 
per  forty  quart  can.  The  Consolidated  Milk  Exchange  has  never 
made  any  attempt  to  prevent  me  from  selling  milk  to  dealers  in 
this  city,  as  I  have  sort  of  a  surplus  product,  and  they  could  not 
compete  with  me  in  price.  I  think  the  Exchange  has  its  advan- 
tages. I  think  that  a  body  of  men  getting  together  from  different 
sections  of  the  country,  understanding  and  expressing  their  views, 
as  the  conditions  exist  in  that  section,  shows  to  that  body  what 
the  supply  of  milk  is.  That  same  body,  naturally  that  is. in  the 
business,  knows  the  demand  for  that  milk.  They  become  better 
acquainted  as  to  the  real  true  condition  existing  and  can  fix  a 
price  at  which  they  could  sell  their  product.  I  think  that  price 
has  some  influence.  I  know  that  personally  if  I  were  going  into 
the  city  of  New  York  to  sell  milk  I  would  have  no  means  of  getting 
knowledge  as  to  the  supply  or  the  demand  that  the  value  that  I 
might  place  on  that  product  might  be  way  out  of  reason.  I  might 
have  paid  too  high  for  it  in  the  country  and  might  offer  it  too 
low.  I  think  it  is  very  desirable  to  have  some  standard  of  com- 
parison in  addition  to  that  established  by  Borden's.  I  am  not  a 
member  of  the  Milk  Exchange.  I  know  what  method  they  adopt 
in  arriving  at  these  values.  I  have  attended  one  or  two  meetings 
of  the  Exchange  by  invitation.  I  think  the  meetings  that  I  at- 
tended were  very  thoroughly  discussed,  each  man  expressing  his 
views  as  to  the  condition  in  this  locality,  and  expressed  whether 
his  milk  was  shrinking  or  whether  he  was  having  a  surplus.  How 


144  [SENATE 

his  trade  was  increasing  or  falling  off,  and  then  I  believe  a  vote 
was  sometimes  taken  as  to  different  views,  what  the  price  should 
be  —  what  would  be  the  real  value  of  milk. 

HENRY  S.  CHAKDAVOYNE  : 

I  reside  at  14  First  place,  Brooklyn.  I  have  been  in  the  milk 
business  about  twenty-four  years.  Am  in  the  business  individ- 
ually. I1'  have  stations  at  McAfee  and  Woodruff  Gap,  New 
Jersey,  and  Jackson  Summit,  Pennsylvania.  I  have  a  store  in 
this  city  at  406  Court  street,  Brooklyn.  I  sell  my  milk  in  New 
York  'State  solely.  I  am  a  stockholder  in  the  Consolidated  Milk 
Exchange.  I  own  five  shares.  '  I  am  not  an  officer  or  director.  I 
was  inspector  of  election.  I  am  not  an  officer,  director,  or  stock- 
holder of  Borden,  Sheffield  or  the  Mutual  companies.  I  have 
attended  meetings  of  the  stockholders  and:  directors  of  the  Con- 
solidated at  6  Harrison  street  and  in  Jersey  City.  I  never  heard 
that  they  dealt  in  milk.  I  don't  know  the  object  of  the  Consoli- 
dated. I  don't  know  why  I  belong  to  it.  I  purchased  the  stock 
which  I  own.  I  don't  think  the  meetings'  of  the  board  of  direct- 
ors of  the  Consolidated  were  entirely  useless.  They  foaind  a 
value  of  milk  and  a  number  of  other  things.  I  pay  twenty-five 
cents  a  year  to  get  the  card  from  the  "  Milk  Reporter  "  and  prob- 
ably receive  from  ten  to  fifteen  cards  each  year.  I  never  heard 
of  any  penalty  levied  on  the  members  of  the  Consolidated  if  they 
did  not  live  up  to  the  prices  established  by  the  board  of  directors. 
I  do  not  go  by  the  Exchange  prices.  I  buy  it  from  the  farmers 
as  cheap  as  I  can  and  sell  it  for  all  I  can.  When  I  purchase  milk 
in  the  country,  farmers  demand  of  me  a  certain  price,  the  Ex- 
change price,  if  possible  — •  the  farmers  called  my  attention  to  it. 
When  I  give  them  their  option,  Exchange  or  Bordeii,  they  all 
take  Exchange.  The  contract  which  we  have  provides  for  every 
change  fixed  by  th«  Exchange,  a  corresponding  change  shall  take 
place  in  the  price  that  we  pay  the  farmer,  or  if  Borden  make  a 
price  for  six  months,  I  pay  the  same.  I  never  heard  that  the 
Consolidated  Exchange  ever  fixed  the  value  o-r  price  of  milk  that 
should  be  charged  by  its  members  to  the  consumer.  During  1908,. 
we  bought  at  part  Borden  and  part  Exchange  prices;  in  1909,, 
it  was  Exchange.  At  one  creamery,  the  price  is  regulated  by 


No.  45.]  145 

what  my  neighbors  pay.  Whatever  price  he  pays  the  farmer  I 
pay  the  same.  Another  creamery  buys  on  the  Babcock  test,  that 
is  the  butter  fat  in  the  milk.  If  butter  is  forty  cents  a  pound, 
and  100  pound's  of  milk  will  test  four  pounds  for  the  hundred, 
I  pay  ten  cents  more  per  pound  than  the  butter  is  selling  for, 
making  two  dollars  per  hundred  for  4  per  cent,  butter  fat  milk. 
This  is  at  Jackson  Summit  butter  manufacturing  station.  When 
I  am  short  of  milk  down  here,  I  receive  some  milk  from  that  sta- 
tion. I  raised  the  price  November  1st  from  8  cents  to  9-  cents 
for  bottle  milk  and  I  sell  a  couple  thousand  bottles  a  day.  I  sell 
about  fifty  cans  of  milk.  Canned  milk  is  sold  to  the  wholesale 
trade.  I  advanced  canned1  milk  10  cents  a  can.  I  had  no  discus- 
sion with  anyone  in  reference  to  the  necessity  of  advancing  the 
price  of  bottle  milk  at  that  time  except  with  my  own  employees. 
Eorden's  price  influenced  me  to  advance  the  price  on  November 
1st.  One  of  my  men  brought  in  one  of  their  cards  on  Saturday, 
saying  that  they  had  advanced  the  price.  I  followed  Borden 
because  he  was  my  largest  competitor.  I  try  to  get  all  of  his 
business  that  I  can.  Members  of  the  Consolidated  Exchange 
also  compete  with  me.  R,  S.  Stevens  Company,  Empire  State 
Dairy,  McDermott  Dairy  Company  and  Diamond,  everyone  of 
them,  come  into  my  territory  and  try  to  undersell  me.  A  driver 
of  the  McDermott  Dairy  Company  went  in  and  offered  a  lady  on 
my  route  milk  for  one  week  free  if  she  would  deal  with  them. 
The  lady  came  and  told  me  personally.  She  was  a  customer  of 
mine.  I  used  to  get  8  per  cent,  dividend  on  my  stock  in  the  Con- 
solidated Milk  Exchange.  I  don't  kno\v  Gorman.  No  one  ap- 
proached me  in  the  year  1909  with  a  proposition  to  subscribe  a 
certain  amount  to  a  campaign  of  education.  I  raised  my  retail 
price  in  1907  from  8  cents  to  9  cents  and  reduced  it  in  the  spring. 
Shortage  compelled  us  to  raise  in  1907.  We  could  not  get  milk 
enough.  We  charged  9  cents  about  three  months  at  that  time. 
We  have  never  entered  into  any  agreement  written  or  oral,  to 
raise  the  price  of  milk  in  1907  or  1909.  I  am  a  stockholder  in 
the  Dairymen's  Manufacturing  Company.  I  am  not  an  officer 
or  director. 


146  [SENATE 

Mr.  COCHRAN  : 

I  reside  at  East  Orange.  I  am  superintendent  of  the 
route  department,  or  city  .delivery  of  the  Borden's  Condensed 
Milk  Company,  and  have  been  such  since  October,  1906.  Pre- 
vious to  that  I  was  assistant  superintendent,  before  that  as  a 
superintendent  of  one  branch,  and  before  that  as  inspector,  and 
before  that  as  a  driver.  Statement  showing  items  that  make  up 
the  cost  of  bottled  milk  as  it  was  sold  by  my  company  in  the 
month  of  December,  19'09,  received  in  evidence  as  follows: 

"  COST  —  EASTERN  BRANCHES 
Month  of  December,  1909. 

Cost  per  quart  for  fluid  milk  used.  .  . .0438 

Labor,  fuel,  miscellaneous   expense,  country  and  milk 

freight 016471 

Labor,  (city),  uniforms,  ice,  horseshoeing,  bottle  caps, 
repairs,  accident  payments,  advertising  matter,  sta- 
tionery —  city  and  country,  furniture,  wast©  and 
gifts  —  city,  feed  and  bedding,  repairs  to  wagons  and 
harness,  bottle  loss,  and  horse  depreciation 0<279'91 


.0882*62  " 

2.15  pounds  of  milk  make  a  quart.  During  the  month  of 
June,  1909,  I  paid  $1.05  per  hundred  pounds.  That  would  be 
2.257  per  quart. 

"  Prices  paid  by  Borden's  Condensed  Milk  Company  to  farmers, 

190'8  and  1909,  as  compared  with  Exchange  prices:  " 
(Prices  paid  by  Exchange  obtained  from  "Milk  Reporter.") 


1908 

EXCHANGE 
Per  qt.            Per  cwt. 

BORDEX'S 
Price 
Per  cwt. 

BORDEN'S 
Plus  or  Minus 
Exchange 
Plus.              Minus. 

January  .... 

.04000 

1.860 

2.00 

.140 

February  .  .  . 
March   . 

.03750 
.03500 

1.744 
1.628 

2.00 

.80 

.256 
.172 

.03124         1.453  1.60  .147 


.  45.] 


BOBDEN'S 

BORDEN'S 
Plus  or  Minus 

EXCH. 

4.NGE 

Price 

Exc 

hange 

1908. 

Per  qt. 

Per  cwt. 

Per  cwt. 

Plus. 

Minus. 

May*  .  . 

.02621 

1.219 

1.30 

.081 

June*  

.02250 

1.046 

1.05 

.004 

July    

.02500 

1.163 

1.25 

.087 

.... 

August  .... 

.03000 

1.395 

1.35 

..... 

.045 

September.  .  . 

.03125 

1.453 

1.50 

.047 

.... 

October     .    .  . 

.03750 

1.744 

1.70 

.... 

.044 

November.  .  . 

.03833 

1.783 

.90 

.117 

.... 

December.   .   . 

.04000 

1.860 

1.90 

.040 

.... 

1909 

January.    .    .  . 

.03910 

1.819 

1.90 

.081 

February.  .  .. 

.03634 

1.690 

1.90 

.210 

March   

.03500 

1.628 

1.70 

.072 

April*  

.03125 

1.453 

1.60 

.147 

May*  

.02670 

1.242 

1.25 

.008 

June*    

.02250 

1.046 

1.10 

.054 

July    

.02750 

•1.279 

1.20 

August  .... 

.03129 

1.455 

1.35 

.... 

September  .   . 

.03500 

1.628 

1.45 

.... 

October  .... 

.03750 

1.744 

1.90 

.156 

November  .  .  . 

.04050 

1.884 

2.00 

.116 

December  .  .  . 

.04250 

1.997 

2.05 

.0-73" 

.079 
.105 

.178 


The  cost  set  forth  in  the  exhibit  previous  to  the  above  is  what 
we  pay  the  producer  direcctly  for  milk.  Exhibit  5"A  is  asi  follows : 

"  Labor,    fuel,    miscellaneous    expense,    country   and 

milk  freight 016471  " 

In  1907  the  price  of  condensed  milk  was  raised  at  the  time  the 
price  of  bottled  milk  was  raised.  I  believe  the  average  price  I 
paid  the  producer  in  1909  was  slightly  less  than  I  paid  in  1908. 
1  use  separators  in  my  creameries  at  South  Worcester,  Daven- 
port, Delhi,  Hamden,  Elk  Creek,  Canaan,  Hopewell  Junction. 
The  separators  are  used  for  making  cre'am  and  for  the  purpose 
of  cleansing  or  purifying  the  milk.  We  make  casein  from  the 
skim  milk.  We  have  never  used  the  separator  to  make  a  milk 

*  Surplus  months. 


148  [SENATE 

that  will  run  3  per  cent  butter  fat.  I  saw  Mr.  Beakes  on  Friday 
before  the  first  of  November  and  I  do  not  know  whether  he  said 
something  or  not  about  raising  the  price  of  milk.  I  believe  he 
said  something  that  led  me  to  believe  that  he  might  possibly  talk 
on  that  subject,  and  I  told  him  that  he  knew  that  I  had.'  not  any- 
thing to  do  with  the  price  of  milk,  and  he  said  he  knew  I  didn't. 
That  was  all  the  conversation  we  had  on  the  price  of  milk.  He 
said  the  price  to  customers  was  low  or  something  of  that  sort.  He 
dtecided  on  the  week  before  the  first  of  November  and  Mr.  Rogers 
called  me  up  and  told  me  that  they  had  decided  to  raise  the  price 
of  milk  and  he  told  me  to  be  very  careful  about  letting  anybody 
know  until  we  got  ready,  just  time  enough  to  give  the  customer- 
notice  that  it  would  be  raised,  and  only  one  young  man  in  our 
office  knew  it  except  myself,  and  I  had  to  take  him  into  my  con- 
fidence to  get  the  cards  printed.  The  printer  had  two  sets  of  men 
on  the  cards ;  one  made  up  the  body  of  the  card  and  the  other  put 
in  the  price,  and  he  was  a  confidential  man  that  he  had  confidence 
in.  The  superintendents  came  to  the  Hudson  street  office  without 
knowing  what  they  came  for  on  Friday  at  three  o'clock,  and  they 
were  to  deliver  those  cards  to  the  drivers  the  next  morning  them- 
selves, so  that  nobody  would  know  until  the  customer  knew. 
There  is  a  good  reason  for  this  secrecy.  If  the  other  dealers  knew 
that  we  were  going  to  raise  the  price  very  long  before  they  did,, 
they  would  probably  bother  our  trade.  We  have  always  had  an 
idea  that  our  milk  was  worth  more  than  other  people's  milk; 
consequently  we  think  that  the  customer  is  willing  to  pay  more. 
Our  veterinary  service  and  inspecting  service  in  the  country  has 
a  great  deal  to  do  with  it.  Also  the  fact  that  our  milk  is  bottled 
in  the  country.  The  card  which  we  sent  out  to  inform  the  people 
that  the  price  of  our  pure  fluid  milk  will  be  advanced  to  9  cents  per 
quart  on  Monday,  November  1,  1909,  signed  Bordens  Condensed 
Milk  Company.  Our  company  is  not  a  member  of  the  Milk 
Dealers  Protective  Association,  and  I  have  never  heard  of  it 
until  I  read  this  testimony  here.  We  pay  a  member  of  the  Brook- 
lyn Milk  Bottlers  Association  $400  per  year  to  collect  our  bottles. 
Our  bottles  are  marked  with  their  capacity.  We  have  been  very 
careful  with  our  glass  dealers.  Our  contract  is  that  the  capacity 
of  the  quart  bottle  must  be  not  less  than  31.6  drams,  or  over  32.2 


~No.  45.]   ,  149 

drams,  and  should  they  be  more,  they  take  back  the  bottles.  That 
gives  the  customer  a  full  quart  of  milk,  provided  the  bottle  is  full 
to  that  point,  I  think  it  is  for  the  benefit  of  the  customer  to  know 
wlu  thcr  he  is  getting  a  full  quart  of  milk  or  half  pint  of  milk 
or  a  pint  of  milk.  For  this  reason  we  have  had  the  capacity 
blown  in  the  bottle.  We  are  charging  8  cents  for  country  bottled 
milk  in  Chicago.  A  list  showing  the  prices  charged  by  various 
milk  companies  in  various1  cities  of  Canada  for  milk  received  in 
evidence  is  as  follows: 

PKICE  OF  FLUID  MILK  IN  BOTTLES  REPORTED  TO 
PREVAIL  IN  OTHER  CITIES. 

Per  quart . 

Montreal,  Canada: 

Half  bottled  in  city ;  balance  at  dairies,  three  miles 

outside  of  the  city ;  sold  for 9c 

Scranion,  Pa,  : 

Two  dealers  bottle  in  the  country  ;  one  sells  at ....  9c 

The  other  at 10c 

Philadelphia,  Pa: 

About  ten  per  cent  of  supply  bottled  at  the  farm, 

sells   for    10c 

One  dealer  supplying  West  Philadelphia,  bottling 

at  Kennett  (just  outside  of  city  limits)  sells  for.  8c 

Baltimore,  Md.: 

All  milk  bottled  in  the  city ;  sold  at 9c  and  lOc 

Buffalo,  N.  Y.: 

Only  one  dealer  bottles  at  dairy ;  sells  for 12c 

Albany,  N.  Y.: 

One  dealer  bottles  at   dairy    (claims  milk  is  cer- 
tified) and  sells  at 14c 

Boston,  Mass.: 

Milk  bottled  at  farm  sold  by  four  dealers,  at lie  to20e 

Milk  used  at  Agricultural  State  Farm  sold  at.  .  .  16c 

Three  of  the  largest  dealers,  bottling  in  Boston, 

sell  at  .  9c 


150  -[SENATE 

T'  Per  quart. 

Providence,  R.  I. : 

Thirty-six  bottle  at  the  farm  and  sell  at.  .  .  . 7c  and  8c 

Majority  sell  at 8c 

Lowell,  Mass.: 

Two  dealers  bottle  at  the  farm ;  sell  for 7c  and  8c 

Manchester,  N.  H.: 

Two  dealers  bottle  at  the  farm;  sell  some  for 8c 

But  most  is  sold  at lOc 

Lawrence,  Mass.: 

Milk  bottled  at  the  farm  ;  sells  for 7c  and  8c 

Medford,  Mass.  : 

Sixty-two  milkmen  in  this  town;  sell  for 8c  and  9c 

Portland,  Me.: 

Bottled  in  the  city ;  sells  at 8c 

Hartford,  Ct.: 

Farmers  bottle  at  farms  near  town  ;  sell  for 8c 

Springfield,  Mass.: 

Bottled  in  the  city ;  sells  for 9c 

Portland,  Me.: 

Bottled  in  the  city ;  sells  for 8c 

Norfolk,  Va.: 

Milk  bottled  at  dairies  near  city ;  not  sold  for  less 

than lOc 

Washington,  D.  C.  : 

All  milk  bottled  in  the  city;  sells  for 9c 

Charleston,  8.  C.: 

Uniform  price,  milk  bottled  in  the  city lOc 

Wilhes-Barre,  Pa.: 

Milk  bottled  in  the  farm ;  sells  for .  lOc 

St.  Paul,  Minn,: 

Milk  bottled  in  city  ;  sold  for 7c 


No.  45.]  151 

Per  quart. 

Minneapolis,  Minn. : 

Milk  bottled  in  the  city ;  sold  for 7c 

New  Orleans,  La.: 

All  milk  bottled  in  the  city;  sells  for lOc  and  12c 

Pittsburgf  Pa.: 

Some  bottled  in  the  country,  most  in  the  city ;  sells 

for 9c  and  lOc 

Jacksonville,  Fla.: 

Eottled  at  dairies  "  in  immediate  neighborhood  ".  .  12c  and  15c 

Syracuse,  N.  Y.  : 

All  bottled  in  the  city  sold  for 7c 

Salt  Lake  City,  U.  : 

"  So-called  sanitary  product,  in  bottles ;"  sells  for.  .  lOc 

Atlanta,  Ga.: 

Practically  all  milk  bottled  in  the  city ;  sells  for ...  lOc 

Omaha,  Neb.: 

All  milk  bottled  at  the  farm;  sells  for.  . lOc  and  12c 

Quebec  City,  Can.: 

Milk  bottled  in  the  city ;  sells  for ,  lOc 

Toronto,  Canada: 

Milk  bottled  in  the  city;  sells  for ,  lOc 

San  Francisco,  Cal. : 

Milk  bottled  at  the  dairy  under  sanitary  conditions.  15c 

Milk  bottled  in  the  city;  sells  for - lOc 

Oakland,  Cal.: 

Milk  bottled  in  the  city ;  sells  for lie 

Alameda,  Cal.: 

Milk  bottled  in  the  city;  sells  for lie 

Berkley,  Cal: 

Milk  bottled  in  the  city ;  sells  for  . lie 


152  [SENATE 

Per  quart. 

Cleveland,  Ohio: 

All  milk  bottled  in  the  city;  sells  for  ...........  8c 

Birmingham,  Ala.: 

Milk  is  bottled  at  dairies  just  outside  of  the  city 

limits,  and  brought  in  on  wagons;  sells  for  ......  lOc 

Memphis,  Tenn.: 

Bottled  at  dairies  adjacent  to  the  city  and  brought 

in  on  wagons  and  delivered  ..................  lOc 

Rochester,  N.  Y.: 

Put  up  at  the  dairy,  claimed  certified  ............  lOc 

Los  Angeles,  Cal.: 

Bottled  at  the  dairy  ;  sells  for  ..................  lOc 

St.  Louis,  Mo.: 

Bottled  in  the  city  ;  sells  for  ..................       7c  and  8c 

Kansas  City,  Mo.: 

Bottled  in  the  city;  sells  for  ..................  lOc 

Butte,  Mont.: 

Little  sold  in  bottles  ;  that  which  is,  is  bottled  near 

Butte  and  brought  in  ;  sells  for  ..............  lOc 

Missoula,  Mont.: 

Milk  collected  by  wagons  ;  some  bottled  in  city;  sold 
twelve  quarts  for  $1.00,  or,  per  quart  ......... 

Great  Falls,  Mont.: 

Milk  brought  into  the  city  on  wagons  and  usually 
delivered  in  bulk;  bottles  carried  for  special 
customers  ................................ 


It  is  my  personal  opinion  that  the  least  handling  you  can  do 
with  milk  the  better.  Consequently  we  bottle  it  in  the  country 
and  it  is  away  from  air  and  atmosphere  and  dust  until  the  cus- 
tomer gets  it  from  very  shortly  after  milking.  The  sooner  you 
get  milk  in  the  bottle,  the  better  ;  and  if  it  is  closed  up  from  the 
time  it  reaches  the  country  until  it  gets  here,  and  thoroughly  iced 


Eo.  45.]  153 

on  the  way  down,  it  is  about  as  fresh  as  you  would  get  it  in  the 
country.  The  object  of  pasteurization  is  not  to  freshen  the  milk 
in  any  way,  but  to  kill  the  germs  that  might  be  injurious.  I 
think  about  120  will  kill  lactic  bactera  and  they  are  very  helpful 
to  the  milk  instead  of  detrimental.  They  say  about  145  for  30 
minutes  and  155  for  20  minutes  to  kill  pathogenic  bacteria  but 
we  try  to  have  no  pathogenic  bacteria  in  our  milk.  Many  phy- 
sicians claim  that  during  the  process  of  pasterur  ization  the  casein 
is  hardened  and  therefore  made  less  digestible.  I  have  never  had 
a  discussion  with  Mr.  Beakes  or  any  of  those  gentlemen  in  refer- 
ence to  raising  the  price  of  milk. 

WILLIAM  B.  CONKLIN  : 

I  reside  at  250  West  Eighty-fifth  street.  I  am  president  and 
treasurer  of  the  Orange  County  Milk  Association.  I  have  never 
been  engaged  in  the  milk  business  on  my  own  account.  I  am 
also  a  director.  We  are  organized  under  special  charter;  Acts  of 
1860.  I  first  became  associated  with  them  on  April  1,  1876.  We 
buy  and  sell  milk ;  manufacture  condensed,  and  we  bottle  ordinary 
fresh  milk.  The  stock  is  $100,000.  I  own  234  shares;  par 
value  $100.  In  1907  and  1908  we  paid  8  per  cent,  dividend.  In 
1909  we  paid  5  per  cent.  I  think  in  1906  we  paid  7  per  cent. 
In  1905,  6  per  cent.  We  own  four  dairies  in  the  country;  con- 
clensery  at  Fultonville,  Montgomery  county ;  condensery  at  Goshen, 
Orange  county;  receiving  station  at  Goshen,  Orange  county,  and 
a  bottling  station  at  Price's  crossing,  betwteen  Wairwick  and 
Vernon,  in  New  Jersey.  The  principal  office  is  at  146  West 
Twenty-fifth  street;  branch  office  at  106  East  One  Hundred  and 
Twenty-sixth  street,  and  421  Classon  avenue,  Brooklyn.  I  am  a 
stockholder  of  the  Consolidated  Milk  Exchange.  The  stock  is 
in  my  name.  It  belongs  to  the  Orange  County  Milk  Association. 
I  am  not  a  member  of  the  Milk  Exchange  Limited.  I  should 
say  I  became  a  member  of  the  Consolidated  about  eight  or  ten 
years  ago.  I  am  a  director  of  the  Consolidated  Milk  Exchange; 
also  vice-president  at  the  present  time.  Director  about  three 
years;  vice-president  about  two  years.  .  I  do  not  own  stock  in 
Borden,  Sheffield,  or  the  Mutual  Company.  About  35  years  ago 
I  was  an  employee  of  Borden's  Condensed  Milk  Company.  I 
do  not  own  stock  in  anv  other  corporation  engaged  in  the  milk 


154     •  [SENATE 

business;  neither  am  I  an  officer,  director  or  employee.  The 
directors'  meetings  that  I  have  attended  have  been  held  at  No.  6 
Harrison  street,  and  part  of  them  in  Jersey  City.  The  Consoli- 
dated Milk  Exchange  does  not  buy  and  sell  milk.  I  understand 
the  object  of  this  Exchange  to  be  the  expression  of  opinion  as  to 
values  of  milk.  There  are  other  matters  that  come  up  before 
them ;  matters  of  transportation,  cans,  matters  of  legal  affairs  that 
come  up,  and  might  be  connected  with  the  milk  business,  as  Mr. 
Laemmle  stated.  In  arriving  at  the  value  of  milk,  if  there  is  a 
quorum  present  an  informal  ballot  is  taken  to  get  an  expression 
of  the  conditions  as  they  prevail  in  different  sections;  the  Board 
is  represented  by  men  from  different  sections;  we  have  men  from 
the  country,  and  men  from  New  York  in  the  milk  business  that 
are  also  farmers  and  connected  with  other  concerns.  An  informal 
ballot  is  taken  to  arrive  at  the  consensus  of  opinion  of  that  Board 
as  to  the  value  of  milk  to-day.  "  Now,  after  that  informal  ballot 
has  been  taken  and  recorded,  then  a  formal  ballot,  a  motion  for  a 
formal  ballot  is  made  and  duly  seconded.  After  that  is  done,  as 
vice-president  of  the  Exchange  and  as  chairman  of  the  price  com- 
mittee at  that  time  I  ask  each  member  around  the  Board  how  he 
has  arrived  at  his  conclusion.  John  Jones  may  tell  me  why  he 
did.  Samuel  Jones  may  say,  '  I  have  nothing  to  say.'  But  I  give 
every  man  around  the  Board  an  opportunity  of  expressing  his 
opinion  as  to  the  conditions  and  why  he  states  that  the  price  should 
be  advanced  a  quarter  or  a  half  or  should  be  lowered  a  quarter  or 
a  half.  Now,  after  that  is  done,  then  the  motion  is  put  and  re- 
corded then  and  there  as  to  the  Exchange  —  the  Exchange  finds 
the  value  of  milk  to  be  to-d'ay  such  a  price.  That  is  exactly  what  is 
done."  When  an  informal  ballot  is  taken  at  the  meeting,  little 
slips  of  paper  are  distributed  among  the  seventeen  directors.  On 
that  slip  the  man  makes  a  figure,  1.71,  1.81,  etc.  He  fold's  it  up 
and  it  is  taken  up  and  the  ballots  are  collected  by  the  clerk  and 
counted.  He  finds  there  are  14  ballots  or  17  'ballots,  15  of  which 
are  for  1.71  and  2  for  1.51  or  1.61.  Then  a  motion  for  a  formal 
ballot  is  made.  Then  after  a  motion  for  a  formal  ballot 
is  made,  as  vice-president  and  the  Chairman  of  the  price 
committee,  I  ask  this  man  how  he  arrived  at  that  particular  figure. 
I  .ask  around  the  Board  until  it  comes  to  the  last  man,  and  each 


"No.  45.]  155 

one  expresses  their  opinion  how  they  arrived  at  that  figure,  which 
was  based  upon  the  conditions  as  they  saw  it,  as  they  met  them  in 
the  country  or  they  saw  it  in  the  city.  .Then  they  have  new  slips 
for  the  formal  ballot.  Now,  some  of  them,  after  listening  to  what 
<each  one  has  said  around,  they -may  conclude  that  their  informal 
ballot  was  wrong,  their  opinion  had  changed  by  the  statements 
that  have  been  made.  This  formal  ballot  decides  it.  The  number 
in  the  majority  decides  the  final  value.  I  announce  then,  that 
as  the  price  for  the  time  being,  and  I  so  announce  to  the  presi- 
dent of  the  Exchange,  who  then  takes  my  place  in  the  chair  and 
makes  the  formal  announcement  to  the  Board.  As  far  as  I  am 
concerned,  the  values  which  were  arrived  at  were  of  no  use.  I 
went  down  to  these  meetings  to  gratify  some  men  that  wanted  me 
as  a  director  and  as  an  officer.  I  have  heard  different  ones  claim 
that  the  fixing  of  value  benefited  them  in  their  arrangement  in 
the  creameries  of  the  country.  I  am  a  subscriber  to  the  "  Milk 
-Reporter."  From  a  memorandum  I  have  I  can  state  that  the 
average  cost  of  our  milk  at  the  present  time  is  4*4  cents  per 
quart.  That  is  bottled  milk.  That  is  the  price  we  pay  the  farmer. 
The  freight  is  l1/^  cents ;  bottling,  %  of  a  cent ;  carting,  1A ;  de- 
livery to  the  consumer,  I1/!  cents;  office  help  and  extra  riders  in 
case  of  sickness,  1M>  cents;  that  is  91A  cents.  This  does  not  in- 
clude wagon  repairs,  extra  bottles  or  rent.  This  is  for  the  month 
of  December.  I  think  the  lowest  I  have  bought  milk  in  June  is 
for  21/2  cents.  We  pay  the  highest  price  during  December  and 
January.  Leaving  out  the  cost  of  the  milk,  I  think  it  costs  us 
about  5  cents  to  handle  it.  There  is  a  difference  between  freight 
on  raw  milk  and  bottled  milk.  The  freight  rate  on  canned  milk 
depends  on  the  zone  that  it  is  in.  We  pay  32  cents  freight,  can 
rate.  I  think  it  is  about  42  cents  bottle  rate.  The  Orange  County 
Milk  Association  raised  the  price  of  bottled  milk  from  8  cents  to 
"9  cents  on  November  4th.  I  fixed  this  price  without  consulta- 
tion with  any  of  the  Board  of  Directors.  I  might  have  consulted 
with  some  one  engaged  in  the  milk  business,  in  a  casual  way, 
previous  to  November  4th  in  reference  to  this  proposed  advance 
in  the  price  of  milk.  I  couldn't  say  with  whom  I  discussed  it. 
Possibly  I  attended  meetings  at  which  the  raise  was  discussed  in 
October ;  I  couldn't  say  off  hand.  There  was  no  other  business 


156  [SENATE 

transacted  at  the  meeting.  There  was  never  any  resolution  passed 
by  the  members  of  the  Board  of  Directors  of  the  Consolidated 
Milk  Exchange,  at  which  I  was  present,  in  which  the  members 
were  in  any  way  advised  or  directed  to  advance  the  price  of  milk 
from  8  cents  to  9  cents.  I  know  "of  no  reason  why  all  advanced 
the  price  at  the  same  time.  I  never  signed  any  agreement  with 
other  dealers  to  advance  the  price.  I  had  to  advance  it  myself 
in  order  to  save  my  company  from  ruin.  AVe  did,  prior  to  the 
advance  of  price  on  November  4th  —  I  did  —  talk  with  other 
dealers  as  to  the  desirability  of  it.  I  do  not  know  Mr.  Gorman, 
the  newspaper  man.  I  turned  down  the  representative  of  the 
newspaper,  in  reference  to  Starting  a  campaign  of  education.  I 
don't  recollect  what  I  said  to  him.  I  met  him  at  No.  6  Harrison 
street,  at  one  time,  but  asked  to  he  excused  as  soon  as  he  com- 
menced talking  to  me.  Individually  I  am  a  member  of  the  Mutual 
Aid  Society.  Our  company  is  interested  in  it.  Our  company  is 
a  stockholder  in  the  Dairyim-ifs  Manufacturing  Company.  1  am 
not  an  officer  or  director  of  that  company.  There  were  sonu- 
special  meetings  of  the  Consolidated  Milk  Exchange  that  were 
called  for  the  purpose  of  considering  the  value  of  milk.  I  bring 
from  fifty  to  sixty  cans  of  loose  milk  to  New  York  per  day,  and 
about  350  cases,  12  quarts  to  a  case;  also  from  75  to  150'  cans 
of  condensed  milk  (40  quart  cans).  I  do  not  remember  writing 
a  letter  to  the  Consolidated  Milk  Exchange  or  its  Board  of  Di- 
rectors about  August  29,  1908. 

(The  following  letter  appears  in  the  minutes  of  the  board  of 
directors  of  the  Consolidated  Milk  Exchange  of  the  meeting  held 
August  29,  1908:) 

"A  letter  from  our  first  president,  W.  B.  Conklin,  was  received 
and  read  to  the  meeting,  in  which  the  writer  expressed  his  hopes 
that  the  directors  will  make  good  use  of  their  usual  good  judg- 
ment in  finding  the  value  of  milk." 

Yes,  I  remember  the  letter  now. 

Interrogated  as  to  whether  the  witness  still  hoped  that  they 
would  continue  to  go  through  with  this  useless  proceeding,  which 
he  had  testified  was  useless,  the  witness  answered,  "  Yes,  sir." 

At  the  meeting  of  November  29,  1909,  there  was  nothing  said 
in  reference  to  placing  a  value  upon  milk.  There  was  no  action 


ISTo.  45.]  157 

taken  or  no  talk  about  it.  The  time  I  raised  the  price  of  bottled 
milk  from  eight  to  nine  cents  a  quart  I  did  not  know  that  Bor- 
dens  had,  or  had  intended,  to  raise  the  price  of  bottled  milk  to  the 
same  amount.  I  heard  some  talk  about  it.  That  did  not  in- 
fluence me  in  my  decision  at  all.  There  was  no  relation  whatso- 
ever in  the  raise  of  the  price  of  milk  by  Borden  and  myself. 
I  could  not  say  that  the  raise  of  any"  one  of  those  dealers  had 
anything  to  do  with  determining  nie  to  raise  the  price  of  milk, 
although  I  think  there  were  quite  a  good  many  raised  within  a 
few  days  of  November  1,  190-9.  I  arrived  at  the  conclusion  to 
raise  the  price  about  the  middle  or  the  20th  of  October.  I  did 
not  know  at  that  time  that  Borden  intended  to  raise  the  price. 
I  attended  a  meeting  at  the  city  hall  in  reference  to  the  milk 
question  before  the  board  of  aldermen,  or  some  committee  of  the 
board  of  aldermen.  I  heard  part  of  the  discussion.  I  do  not 
remember  whether  I  saw  Mr.  Gorman  there  or  not.  I  have  no 
knowledge  or  remembrance  of  telling  Mr.  Gorman  as  far  as  my 
subscription  is  concerned  I  would  go  in  as  I  told  him  and  he 
could  have  any  one  from  his  paper  or  any  of  the  dealers  telephone 
to  me  and  I  would  confirm  what  I  had  told  him.  I  wouldn't 
swear  that  when  Mr.  Gorman  asked  me  to  sign  the  paper  for  the 
educational  campaign,  I  replied  to  him  :  "I  don't  want  to  be 
so  near  the  top.  I  don't  want  to  appear  as  one  of  the  leaders." 
No  one  connected  with  Borden's  in  an  official  capacity  or  as 
director  owns  stock  in  the  Orange  County  Milk  Association.  At 
nine  cents  a  quart  we  calculate  at  the  present  time  we  are  losing 
more  than  one-quarter  of  a  cent  on  every  quart  we  sell. 


WILLIAM  B. 

Prices  paid  to  the  producers  for  milk  at  Price's  Station,  New 

Jersey  : 

1907,  average  for  six  months,  three  cents  a  quart. 

1908,  average  for  six  months,  $1.35  per  cwt. 

1909,  average  for  six  months,  $1.85  per  cwt. 
1909,  average  for  other  six  months,  $1.30  per  cwt. 
1909  and  1910,  average  for  six  months,  $1.96  per  cwt. 


158  [SENATE 

Prices  paid  to  the  producers  for  milk  at  Montgomery  county, 

N.  Y.: 

1907,  average  for  six  months,  $1.08  per  cwt. 

1907  and  1908,  average  for  six  months,  $1.49  per  cwt. 

1908,  average  for  six  months,  $l!20  per  cwt. 

1908  and  1909,  average  for  six  months,  $1.63  per  cwt. 

1909,  average  for  six  months,  $1.15  per  cwt. 
1909,  average  for  last  three  months,  $1.83  per  cwt. 

Prices  paid  to  the  producers  for  milk  at  Orange  County,  N.  Y.: 

1907,  average  for  six  months,  $1.34  per  cwt. 

1907  and  1908,  average  for  six  months,  $1.93  per  cwt. 

1908,  average  for  six  months,  $1.35  per  cwt, 

1908  and  1909,  average  for  six  months,  $1.83  per  cwt. 

1909,  average  for  six  months,  $1.30  per  cwt. 

1909  and  1910,  average  for  six  months,  $1.96  per  cwt. 
(Blank   form   given    to   producers    received   in   evidence    and 

marked  Exhibit-G.) 

All  the  producers  that  take  from  me  at  one  place,  I  pay  them 
the  exchange  prices  for  milk.  That  place  is  at  Goshen.  In  the 
blank  space  I  would  fill  in  "  'Market  Prices."  That  necessarily 
does  not  mean  exchange  prices.  The  farmers  did  not  sign  the 
form,  they  simply  took  them  home  and  read  them  for  the  infor- 
mation. If  I  filled  out  on  the  'second  page  of  this  paper  called 
rules  and  regulations  (Exhibit,  4-G),  the  prices,  and  the  farmer 
began  to  make  deliveries  and  complied  with  all  these  rules,  I 
would  feel  myself  obliged  to  accept  his  milk  during  all  the  months 
opposite  which  I  had  set  a  price.  As  soon  as  the  price  is  set  on 
this  form,  I  regard  it  as  a  contract.  There  is  always  a  feeling 
in  the  country  that  they  want  to  wait  and  see  what  Borden's 
prices  'are.  The  above  answer  in  reference  to  the  question  as  to 
whether  there  are  only  two  standards  of  prices,  Borden's  or  ex- 
change, regarded  as  'the  market,  I  don't  consult  Borden's  prices 
when  making  up  my  mind  what  the  market  is.  We  leave  that 
with  the  farmer  to  decide.  I  take  into  account  the  different 
prices  when  arriving  at  the  market  price.  Market  prices,  valua- 
tions >as  have  been  found  by  the  exchange.  I  am  paying  four 


No.  45.]  159 

and  one-fourth  cents  a  quart  at  Goshen.  That  is  the  exchange 
price  at  the  present,  time.  I  don't  think  there  is  a.  single  instance, 
in  this  creamery  that  I  have  at  Goshen,  where  I  haven't  paid  for 
any  single  month  the  exchange  price  for  milk  to  any  single  farmer. 
As  to  the  question,  "  Wouldn't  it  have  been  to  your  interest  to 
have  used  your  influence  and  your  vote  in  the  board  of  directors 
of  the  Consolidated  Milk  Exchange  to  reduce  the  price  to  be 
paid  to  the  farmer  at  certain  times,"  after  many  objections  on 
the  part  of  Mr.  Ely,  witness  answered,  "  I  have  no  answer  to  it." 
I  buy  milk  from  some  farmers,  based  upon  exchange  prices. 

THOMPSON  W.  DECKER: 

I  am  the  treasurer  of  the  Sheffield  Farms,  iSlawson  &  Decker 
Company,  and  have  been  such  since  its  incorporation,  and  have 
been  a  director  since  its  incorporation  and  am  now  a  director. 
I  am  one  of  the  original  owners  of  the  Decker  concern  that  went 
into  this  corporation.  I  have  nothing  particular  to  do  with  fixing 
the  price  of  milk  that  is  fixed  for  producers.  In  the  latter  part 
of  September  we  talked  about  raising  the  price  to  the  consumer 
from  eight  to  nine  cents.  We  thought  that  we  ought  to  raise 
the  price,  but  we  hadn't  decided  on  it.  We  talked  the  matter 
over  —  in  October  Mr.  Horton  went  away  and  he  said,  "Now, 
gentlemen,  we  will  postpone  this  until  I  come  back,  until  we  see 
the  condition  of  things."  When  he  came  back  he  heard  that 
Borden  had  raised  the  price.  a  He  decided  to  raise  the  price,  our 
price."  Borden's  raise  of  price  might  have  influenced  us  some- 
what. I  never  had  a  consultation  with  any  dealer  prior  to 
November  1,  1909,  in  reference  to  the  advisability  of  raising  the 
price  of  household  milk,  only  in  a  general  way,  when  anybody 
came  in  that  talked  price;  but  no  definite  understanding  with 
anybody.  I  do  not  know  any  officers  of  the  Mutual  Milk  and 
Cream  Company,  except  Mr.  Kavanaugh.  I  met  him  at  the  office 
of  the  Charity  Commissioners.  We  both  had  a  bid  in  there  to 
supply  the  institutions,  I  know  C.  H.  C.  Beakes,  Walter  R. 
Comfort,  T.  O.  Smith,  Joseph  Laemmle,  Mr.  Campbell,  Mr, 
Conklin  and  Mr.  Bleier,  Mr.  Slaughter  and  Mr.  L.  L.  Campbell. 
I  haven't  seen  any  of  these  men  during  three  or  four  months 
immediately  preceding  November  1,  1909,  and  have  had  no  com- 
munications with  them. 


160  [SENATE 

ALFRED  ELY: 

I  reside  at  New  York  city  and  divide  my  energies  between 
farming  and  practicing  law.  I  have  never  been  in  the  milk 
business.  I  have  five  shares  of  the  Consolidated  Milk  Exchange. 
I  have  had  these  five  shares  since  ks  incorporation.  I  prepared 
the  incorporation  papers  for  the  company.  I  think  I  had  one  or 
two  shares  in  the  old  Milk  Exchange,  Limited.  I  was  counsel 
for  the  Milk  Exchange  in  the  action  brought  against  it  by  the 
Attorney-General  to  dissolve  it.  Some  of  the  stockholders  of  the 
old  Milk  Exchange,  Limited,  are  also  stockholders  in  the  Con- 
solidated Milk  Exchange.  I  know  of  no  objects  of  the  incorpora- 
tion of  the  Consolidated  Milk  Exchange  except  as  they  are  stated 
in  the  articles  of  incorporation.  I  have  attended  annual  meetings 
of  the  stockholders  of  the  Consolidated  Milk  Exchange  in  one  or 
two  instances,  but  I  don't  recall  when  they  were.  They  were  a 
good  many  years  ago.  I  attended  a  meeting  of  the  board  of  di- 
rectors within  about  two  or  three  weeks,  but  I  refuse  to  state 
what  took  place  at  the  meeting,  as  I  was  there  in  a  professional 
capacity.  I  never  heard  of  any  agreement  among  the  members 
of  the  stockholders  of  the  Consolidated  Milk  Exchange  to  raise 
the  price  of  bottle  milk  from  eight  to  nine  cents  a  quart  on  or 
about  November  1,  1909.  I  should  like  to  state  that  in  my 
opinion  this  whole  proceeding  is  based  on  the  misinformation 
or  a  mistaken  imagination.  In  my  opinion  the  increase  in  the 
price  of  milk  during  this  present  winter  is  fully  justified  by  the 
conditions  of  supply  and  demand  and  the  prices  paid  the  farmer. 
As  a  farmer  I  am  being  paid  and  receive  more  for  my  milk 
than  I  have  received  before  for  many  years,  and  as  a  farmer, 
my  opinion  is  that  the  price  paid  to  us  is  insufficient  even  now, 
having  in  view  the  conditions  under  which  milk  is  produced 
by  farmers  and  producers  at  the  present  time.  The  burdens 
upon  the  farmer  and  cost  of  producing  milk  has  been  steadily 
increasing  for  many  years.  In  some  sections  of  the  country  that 
I  know  of  the  farmers  have  in  recent  years  diminished  the 
amount  of  milk  they  produce  because  the  price  which  they  re- 
ceived did  not  in  their  opinion  sufficiently  compensate  them,  and 
in  order  to  keep  up  with  the  proper  production  under  present 
conditions,  every  dairy  farmer  has  had  to  increase  his  capital, 


'No.  45.]  161 

rebuild  his  barns  and  produce  milk  under  conditions  compelling 
constantly  increasing  costs.  Labor  has  increased,  feed  has  in- 
creased, the  average  values  in  cost  of  dairy  cows  has  increased, 
the  cost  of  buildings  has  increased,  and  maintenance  and  opera- 
tion in  every  respect;  cost  of  handling  the  milk  has  increased, 
everything  has  increased.  One  of  the  chief  items  of  increase 
has  been  the  cost  of  feed;  and  if  the  Attorney-General  would 
look  into  the  cost  of  feed  to  the  farmer  he  would  be  doing  the 
farmer  a  much  greater  service  than  in  looking  into  the  normal 
and  natural  increase  in  the  price  of  milk  based  upon  the  slight 
increase  to  the  producer.  From  my  knowledge  of  the  milk  busi- 
ness, it  is  impossible  to  have  any  such  combination  or  agreement 
as  you  mistakenly  think  exists.  There  is  the  keenest  kind  of 
competition  so  far  as  I  have  knowledge  or  information  extending 
over  a  great  many  years,  between  the  milkmen  of  every  grade 
and  every  kind,  and  a  great  many  men  have  gone  out  of  the 
business  in  the  last  ten  years  because  they  could  not  survive 
under  the  conditions  which  have  existed.  The  competition  has 
been  so  keen  that  they  have  died  in  great  numbers,  and  the 
tendency  has  been  in  the  milk  business  within  fifteen  years  to 
constantly  liminate  the  smaller  man  and  constantly  aggregating 
the  business  in  the  hands  of  these  large  companies  like  Borden's, 
Slawsoii-Decker,  Mutual,  McDermott,  and  others,  all  of  whom 
have  been  increasing  steadily  in  size  and  amount  of  business  done 
and  number  of  quarts  handled  during  the  last  fifteen  years,  and 
to  the  gradual  exclusion  and  elimination  of  the  smaller  men  who 
were  in  the  business  fifteen  or  twenty  years  ago.  The  farmer 
has  been  driven  out  of  the  New  York  market  entirely.  I  have 
got  about  250  cows  on  my  different  places.  They  are  located 
in  the  Warwick  valley,  part  in  New  York  and  part  in  New 
Jersey.  I  deliver  three  dairies  to  Borden's,  and  two  dairies  to 
the  Orange  County  Milk  Association.  It  all  comes  in  over  the 
Erie  road.  My  recollection  is  that  I  was  counsel  in  the  organiza- 
tion of  the  Consolidated  Milk  Exchange.  As  such  counsel,  I 
advised  them  at  the  outset  They  have  not  consulted  me  and 
I  do  not  recall  having  advised  them  or  served  them  now  in  a 
good  many  years.  My  recollection  is  that  I  advised  the  Con- 
solidated Milk  Exchange  that  they  must  not  attempt  in  any 
6 


162  [SENATE 

way  to  name  a  price  or  to  fix  a  price  or  to  have  any  agreement 
or  understanding  with  respect  to  prices.  I  remember  you  (the 
referee),  and  I  had  some  talk  on  that  at  some  time  walking 
down  from  this  reference,  and  I  have  been  several  times  since 
then  turning  it  over  in  my  mind-  and  my  recollection  doesn't 
return  to  me  in  reference  to  that.  I  did  advise  them  that  they 
must  not  attempt  in  any  way  whatever  to  make  a  price  or  fix 
a  price  or  name  a  price  or  do  anything  that  should  work  that 
way.  You  see,  the  Milk  Exchange  Limited,  was  a  business- 
corporation,  organized  as  such,  to  buy  and  sell  milk,  and  its 
business  was  exclusively  to  sell  milk  for  farmers  upon  a  com- 
mission, and  it  by  resolutions  of  the  board  fixed  in  advance  the 
price  wrhich  it  would  undertake  to  charge  the  dealer  in  the  city 
for  the  milk  which  it  sold  as  a  commission  merchant,  and  that 
was  a  novelty  in  the  milk  trade.  That  thing  had  never  been 
done  before.  Previous  to  that  time  the  farmer  had  sent  his  milk 
down  to  Xew  York,  and  the  value,  the  ultimate  money  payments,. 
was  either  collected  by  the  farmer  personally  or  was  collected 
by  species  of  commission  merchants,  who  collected  the  amount 
which  he  received  from  the  milkman  in  Xew  York  city,  but  what 
wTas  to  be  the  amount  collected  was  rarely  known  in  advance  until 
generally  sometimes  ten  or  fifteen  days  afterwards,  and  there  was- 
some  way  or  other  a  price  was  agreed  upon  in  some  way,  as  Mr. 
Campbell  testified  here  with  reference  to  that  point.  "Now  the 
Milk  Exchange  Limited  - 

Q.  You  are  now  speaking  of  the  old  company  ?  A.  I  am 
speaking  of  the  Milk  Exchange  Limited,  which  is  a  business  cor- 
poration, pure  and  simple,  nothing  else;  the  Milk  Exchange  Lim- 
ited undertook  to  do  the  business  of  a  commission  merchant  and 
to  state  in  advance  that  it  would  take  dairies  of  milk  for  farmers 
and  sell  them  on  a  commission  of  3  per  cent,  and  would  announce- 
to  the  farmers  in  advance  the  precise  'amount  which  it  would 
agree  to  collect  for,  and  in  doing  so,  it  had  naturally  to  state  the 
price  at  which  it  wrould  sell,  so  that  if  it  took  a  dairy  of  milk 
to  sell,  it  was  bound  to  collect  the  price  it  stated  for  the  benefit 
of  the  farmer,  less  3  per  cent,  commission,  and  unless  the  man 
in  Xew  York  would  pay  the  Exchange  Limited  that  price,  they 
couldn't  sell  it,  or  they  would  have  to  make  up  the  deficiency  to- 


Xo.  45.]  163 

the  farmer  out  of  their  own  pocket.  Of  course  if  they  sold  for 
more,  then  the  farmer  got  the  benefit  of  it.  .  Xow,  the  old  Ex- 
change named  that  price ;  that  was  'the  Milk  Exchange  price,  and 
that  was  all  the  Milk  Exchange  price  was ;  it  was  the  price  which 
the  Milk  Exchange  undertook  — 

Q.  Didn't  they  hold  themselves  out  to  the  farmers  as  being 
a  wholly  disinterested  body  of  men  that  were  endeavoring  to 
arrive  at  a  fair  valuation  of  milk  in  ISTew  York  city,  when  in 
reality  they  were  commission  merchants  ?  A.  ~No.  They  didn't 
hold  themselves  out  anything  of  that  kind.  There  was  no  doubt 
about  the  proposition,  whatever. 

Mr.  Referee,  I  have  some  very  valuable  statistics  which  I  will 
be  glad  to  give.  They  are  based  on  thirty  years'  experience  in 
farming.  In  this  investigation,  my  opinion  is  that  the  State  has 
no  concern  with  the  cost  of  milk  or  the  cost  of  handling  it  or 
the  price.  Under  this  investigation,  the  only  thing,  in  my 
opinion,  that  has  any  weight  is  whether  there  was  a  combination 
or  not,  and  the  courts  have  already  held  that  the  profit  and  loss 
is  not  a  question  in  this  investigation.  I  think  that  is  pretty 
good  authority.  I  never  heard  of  the  Consolidated  Milk  Ex- 
change doing  any  mercantile  business.  It  is  incorporated  under 
the  statutes  of  'the  State  of  New  Jersey.  In  reference  to  the  fact 
that  the  farmer  or  producer  obtains  on  an  average  a  price  of 
three  and  one-third  cents  a  quart  for  his  milk,  and  the  middle 
man  2'ets  nearlv  six  cents,  I  would  say  as  a  farmer :  The  year 

Or  t/  */ 

begins  on  the  first  day  of  April  in  each  year,  and  ends  on  the 
thirty-first  day  of  March  in  the  following  year,  and  all  milk 
prices  and  all  farm  contracts  and  all  farm  payments  and  expenses 
and  all  farm  accounts  are  made  with  reference  to  that  farm 
year,  from  April  to  April,  and  not  with  reference  to"  the  calendar 
year.  Now,  with  reference  to  the  farm  year,  it  is  divided  into 
two  halves,  one  half  running  from  April  first  to  October  first,  and 
the  other  half  running  from  October  first  to  April  first,  and 
almost  all  dairy  statistics  and  dairy  prices  so  far  as  milk  is  con- 
cerned are  averaged  and  rated  with  reference  to  those  two  half 
years  and  never  together.  They  are  rated  separately  and  the 
only  bringing  of  those  together  and  making  a  year's  average  is 
for  comparative  purposes  and  not  with  reference  to  the  facts 


164  [SENATE 

except  as  they  may  be  comparative.  The  costs  of  producing 
milk  are  totally  different  when  considered  during  the  six  sum- 
mer months,  which  are  April,  May,  June,  July,  August  and 
September,  and  the  six  winter  months,  so  called,  October,  Novem- 
ber, December,  January,  February  and  March.  During  the  sum- 
mer months  the  cattle  are  at  pasture  mostly.  \Ve  turn  them  out 
in  our  M-rtioiL  of  the  country  any  time  from  the  15th  of  April  on, 
dependent,  on  the  season  and  on  the  weather.  We  begin  to  stall 
and  stall  feed  from  the  middle  of  October  on,  according  to  the 
weather.  The  costs  of  producing  during  the  winter  months  are 
very  different  from  the  cost  of  producing  during  the  summer 
months,  and  the  prices  that  we  receive  during  the  winter  months 
are  different  from  the  prices  we  receive  during  the  summer 
months.  The  large  milk  companies  like  Borden's  announce  their 
prices  always  for  six  months  and  no  more.  On  the  fifteenth  day 
of  .March  they  announce  the  prices  they  will  pay  for  the  ensuing 
summer  months  and  are  called  their  summer  prices,  and  averaged 
up  accordingly  by  those  who  keep  accounts,  the  farmers  who  keep 
accounts.  On  the  K.th  of  September  the  Uordon's  and  others 
similarly  working  announce  their  pi-ices  for  the  ensuing  six 
months,  and  they  are  called  the  winter  prices.  There  is  a  wide 
difference  between  those  two  prices  which  disappears  when  you 
average.  Now,  IJorden's  are  paying  me  for  three  of  my  dairies 
now  for  this  current  six  months  beginning  with  October  1,  1908, 
and  ending  March  31.  or  April  1,  1010,  an  average  per  hundred 
pounds  of  "J.t'Mii;  or  an  average  of  4.171)  cents  per  quart,  that  is 
almost  4.18  cents  or  .0418  cents.  Xow  I  am  getting  4.18  cent- 
averaged  from  Border's  for  every  <piart  of  milk  1  deliver  to  them 
from  the  first  day  of  October  current  to  the  first  day  of  next  April 
current,  that  is  what  I  am  getting. 

Q.  IToAv  about  the  last  summer  months?  A.  Take  the  last 
summer  nfonths  from  April  1,  1909,  to  September  30  or  October 
1,  1909,  I  received  from  Borden's  an  average  for  every  pound 
of  milk  I  delivered  to  them  of  1.30  per  hundred  which  averaged 
into  quarts,  if  my  computation  is  correct,  and  I  think  it  is, 
.02797:  that  is,  almost,  we  will  say  2.8,  very  close  to  2.8  cents; 
so  that  within  the  last  twelve  months,  during  the  six  summer 
months.  I  received  practically,  within  a  fraction  of  a  thousandth 


No.   45.]  165 

of  a  cent.  2.8  cents  for  the  six  summer  months'  and  I  am  now 
receiving  4.18  cents  for  the  six  winter  months;  so  von  will  see 
if  I  averaged  those  together  it  brings  'the  thing  down,  but  neither 
one  of  those  averages  is  the  correct  reflection  for  the  winter  months 
or  the  correct  reflection  for  the  summer  months;  so  that  in  order 
to  be  correct  you  must  keep  those  averages  separate.  Borden 
pays  me  4.18  cents  for  every  quart  of  milk  I  bring  them,  more 
or  less,  and  they  take  every  quart  I  deliver.  It  is  weighed  up 
by  the  pound,  no  matter  how  it  varies,  and  it  varies  of  course 
from  day  to  day;  those  are  the  prices  which  I  am  receiving  for 
three  of  my  dairies,  and  have  received.  I  deliver  at  New  Mil- 
ford,  Orange  county,  at  Borders  station.  My  men  drive  in  there, 
two  of  them,  two  of  my  dairies  go  into  Borden' s  receiving  station 
at  New  Milford,  Orange  county,  New  York,  and  my  two  farmers 
are  there  with  milk  before  8 :30  o'clock,  with  the  milk  of  the 
morning's  milking  and  the  night's  before  milking,  and  they  weigh 
up  and  I  get  credit  for  every  pound  I  deliver.  I  suppose  the 
fractions  of  a  pound  are  against  me;  I  don't  know.  Now,  then, 
on  the  fifteenth  of  the  following  month,  I  get  a  check  from  Mr. 
Borden  for  the  total  number  of  pounds  and  the  price  per  hundred 
attached  to  the  check.  On  the  second  or  third  day  I  get  the 
report  from  the  farm  giving  me  the  price-number  of  pounds  he 
delivered,  and  I  check  one  against  the  other,  and  I  don't  know 
whether  I  am  right  or  not.  The  third  of  my  dairies  o-oes  to 
Borden's  at  Huntsville,  New  Jersey,  where  the  result  is  the  same; 
and  so  far  as  I  know  anything  about  it,  Borden's  pay  exactly  the 
same  price  in  all  of  their  receiving  stations  for  all  milk  that  they 
receive.  Now,  in  addition  —  this  is  an  important  proposition  — 
all  the  milk  of  the  present  day  within  the  New  York  radius  is 
produced  under  conditions  imposed  by  the  New  York  Health  De- 
partment. My  stables  are  inspected  constantly;  my  cattle  are 
inspected  constantly ;  and  the  care  and  cleanliness  and  every  other 
element,  the  condition  of  the  cattle  which  goes  into  the  produc- 
tion of  healthy  milk,  is  looked  after  very  closely,  indeed,  by  Bor- 
den's and  by  the  health  department,  by  the  local  health  people, 
and  if  they  sometimes  only  had  inspectors  who  knew  something 
about  dairying,  the  result  would  be  even  better  than  it  is.  But 
for  myself,  personally,  I  welcome  this  thing,  because  it  is  of  the 


160  [SENATE 

greatest  importance  to  me  to  have  things  in  good  order;  it  is  of 
more  importance  to  me  to  have  things  in  good  order  than  it  is  to 
produce  a  few  pounds  more  or  less  of  milk,  and  I  find  that  the 
inspections  of  the  health  department  of  New  York  and  of  the  Bor- 
dens  are  of  great  assistance  in  increasing  the  general  quality  of 
the  milk.  Of  course  that  costs  more.  I  have  had  to  rebuild  most 
of  my  barns  in  the  last  fifteen  years.  I  suppose  I  have  got  on 
my  place  one  of  the  finest  dairy  barns  in  existence.  I  have  known 
places  on  the  East  side  and  among  the  poorer  sections  where  you 
could  buy  good  milk  in  New  York  city  for  four  cents  a  quart, 
or  if  they  got  three  quarts,  they  might  get  it  for  ten  cents.  I 
am  not  speaking  of  the  men  on  Fourth,  Fifth  and  Sixth  avenues 
and  the  blocks  between  that.  They  have  always  paid  a  higher 
price  than  others,  because  the  cost  of  delivery  is  much  greater; 
but  the  vast  amount  of  milk  in  this  city  is  delivered  in  cans  to 
stores  and  dipped  out  of  the  stores  to  the  people  who  come  there 
and,  in  my  opinion,  that  is  more  than  60  per  centum  of  the  milk 
that  comes  into  New  York  city.  In  1877  there  was  a  statute 
passed  in  this  State  authorizing  the  incorporation  of  boards  of 
trade  and  exchanges;  that  statute  provides  as  follows;  passed  May 
3,  1877 :  "At  any  time  hereafter,  any  twelve  or  more  persons  who 
may  desire  to  form  a  corporation  commonly  called  board  of  trade 
or  exchange,  for  the  purpose  of  fostering  trade  and  commerce  to 
protect  it  from  unjust  or  unlawful  exactions,  to  reform  adduces" 
in  the  trade,  to  diffuse  accurate  and  reliable  information  among 
its  members  as  to  the  standing  of  merchants,  and  other  matters, 
to  produce  uniformity  and  certainty  in  the  customs  and  usages 
of  the  trade,  to  settle  differences  between  its  members,  and  to 
promote  more  friendly  intercourse  between  merchants,  may  make, 
sign,  acknowledge,  and  so  forth."  At  the  time  it  was  contemplated 
organizing  this  Milk  Exchange  Limited  that  statute  was  supposed 
be  me  to  be  still  in  force,  and  a  certificate  of  incorporation  was 
prepared  by  me  for  the  incorporation  in  the  State  of  New  York  of 
a  milk  exchange  substantially  on  the  identical  lines  of  the  certi- 
ficate of  incorporation  substantially  as  filed  in  New  Jersey.  This 
certificate  of  incorporation  containing  this  very  provision  which 
you  have  referred  to  several  times  and  which  is  also  in  the  statute, 
"  To  produce  uniformity  and  certainty  in  the  customs  and  usages 


Ko.  45.]  167 

of  the  trade  "  was  sent  to  Albany  to  the  Secretary  of  State,  and 
then  returned  to  me  with  the  notation  that  this  statute  of  1877 
had  been  repealed  that  July  by  a  statute  passed  the  previous  ses- 
sion. I  was  also  informed  that  there  was  another  corporation 
of  so  similar  a  name  in  the  State  of  i^ew  York,  called  the  ISfew 
York  Milk  Exchange,  that  it  for  that  purpose  seemed  inadvisable 
to  incorporate  the  Exchange  in  the  State  of  Xew  York.  But  it 
was  a  perfectly  legal,  statutory  provision  to  organize  a  corpora- 
tion for  the  purpose  of  promoting  uniformity  and  certainty  in 
the  customs  and  usages  of  trade.  That  same  year  the  Member- 
ship Corporation  Law  was  passed,  and  the  Membership  Corpo- 
ration Law  embodied  in  it  word  for  word  these  very  provisions 
(Laws  of  1895,  chapter  559).  Subsequently  this  identical  stat- 
ute, Laws  -of  189'5,  chapter  559,  which  was  in  this  respect  a  re- 
enactment  of  the  clause  of  1877,  became  a  part  of  the  Consoli- 
dated Laws  of  this  State,  and  at  the  present  time  a  board  of  trade 
or  exchange  or  corporation  may  be  formed  in  this  State  for  the 
pjrecise  purpose,  of  promoting  uniformity  in  the  customs  and 
usages  of  trade,  so  that  the  provision  of  the  certificate  of  incorpo- 
ration that  "  one  of  the  objects  of  the  corporation  was  to  produce 
uniformity  and  certainty  in  the  customs  and  usages  of  the  trade  " 
is  absolutely  lawful  both  in  this  State  and  in  any  other  state  that 
I  know  anything  about,  so  that  the  provision  which  is  inserted  in 
there  was  inserted  as  a  transcript  of  the  provision  then  author- 
ized and  now  authorized  by  statute  of  the  State  of  Eiew  York ; 
so  that  the  provision  with  reference  to  the  certainty  and1  uni- 
formity in  the  customs  and  usages  of  the  trade  was  a  legal  pro- 
vision, was  copied  from  the  statute  of  Xew  York  then  in  force 
and  at  present  in  force.  That  refreshes  my  recollection,  with 
reference  to  that  point,  and  I  found  the  original  certificate  which 
I  had  drawn  at  that  time  and  the  letters  of  the  Secretary  of  State. 
Xow.  with  reference  to  some  of  the  questions  that  you  have  asked 
me,  as  to  the  cost  of  producing  milk,  I  would  like  to  give  these 
statistics  now  because  they  are  in  such  form  that  they  would  be 
interesting  in  comparison,  I  think.  Subsequently,  I  might  like 
to  supplement  these,  if  it  seems  desirable.  I  have  taken  the  last 
six  years'  returns  from  my  farms,  with  respect  to  which  I  have 
kept  accurate  statistics,  and  I  have  averaged  those  last  six  years7 


168  [SENATE 

returns  in  a  variety  of  ways.  I  have  taken  four  farms  for  the  six 
years  and  averaged  them.  I  have  then  taken  two  separate  farms 
and  averaged  them  toother  for  six  years,  the  conditions  of  those 
farms  being  almost  identical  in  so  far  as  it  is  possible  to  have  two 
farms  operating  under  the  same  conditions.  I  have  taken  one 
other  farm  where  tin-  conditions  are  better  than  the  two  preceding 
farms  and  averaged  those  up  for  six  years,  and  T  have  averaged 
this  last  farm  back  for  eleven  years.  I  find  the  price"  of  milk 
which  I  have  received  for  those  six  years,  averaged  up,  is  as  fol- 
lows, this  being  the  actual  price  per  quart  actually  received  by  me 
in  cash,  the  gross  receipts  being  divided  by  the  gross  number  of 
<1  u arts,  so  that  this  result  is  without  any  connection  whatever 
with  any  posted  price  or  contract  price,  the  differences  resulting 
from  the  fact  that  more  money  might  be  made  under 'one  price, 
or  more  money  might  be  made  in  the  winter  months  than  the 
summer  months,  or  vice  versa:  For  four  farms  averaged  for 
six  years,  beginning  April  1,  1909,  I  received  .n^lil)  cents  per 
quart;  that  is  one-hundredth  of  a  cent  less  than  three  cents.  My 
feed  during  those  six  years  averaged  up  for  the  four  farms  was 
-ID  per  cent,  of  the  price  received,  and  met  net  proceedings  per 
cow  milking  averaged  tor  the  six  years  on  the  four  farms  was 
$50.08,  after  deducting  the  feed  bills.  \o\v,  'during  this  period 
and  under  the.  same  average,  it  took  1.1.")  pounds  of  feed  to  make 
one  quart  of  milk,  at  an  average  cost  per  quart  of  $.0*141.  That 
is  one  and  fourteenth  cents.  Now,  take  the  two  other  farms 
where  the  conditions  are  identical  a.s  far  as  it  is  possible  for  them 
to  l^e,;  they  lie  right  together  in  part  of  the  siime  tract;  for  the 
six  years  I  received  $.0290  per  quart.  The  cost  of  the  feed  was 
approximately  .368  per  cent  of  the  price,  The  net  profit  per 
co\v  milking  after  deducting  the  feed  bills,  but  making  no  other 
deductions,  was  $54.37  per  cow  milking.  Xow  take  one  other 
farm,  a  farm  by  itself,  not  included,  for  the  same  six-year  period, 
averaged,  my  actual  price  received  was  $.0299  per  quart.  The 
feed  was  43  per  cent,  of  the  price.  And  the  net  receipts  per  cow 
milking,  after  deducting  the  feed  bills,  was  $64.98.  Now  take 
the  same  farm  for  eleven  years,  beginning  with  April  1,  1898, 
and  ending  April  1.  1909,  my  price  received  was  $.02!T2  per 
quart.  "My  average  feed  Avas  .418  per  cent,  of  the  price  received 


No.  45.]  169 

(I  am  speaking  only  of  my  own  prices  received),  and  the  net 
receipts  per  cow  milking,  after  deducting  the  feed  bills  for  eleven 
years,  was  $59.73  per  cow  milking.  It  took  during  those  eleven 
years  1.7  pounds  of  feed,  averaged  through  the  year,  to  make  a 
quart  of  milk,  at  an  average  price  for  the  eleven  years  of  $.01114:. 

The  Referee. —  You  mean  grain  or  feed  ?  A.  I  mean  all  feed 
that  is  fed,  weighed  by  the  pound  and  averaged  for  the  year.  I 
know  what  I  am  feeding;  I  keep  track.  That  is  all  the  feed 
that  is  fed.  Now,  the  average  feed  fed  during  the  six  years, 
averaged  up  for  all  these  farms,  and  under  varying  conditions, 
was  .421  per  cent,  of  the  price  received ;  slightly  over  42  per  cent. 
so  that  it  is  a  very  close  approximation,  and  in  my  opinion,  that 
is  an  almost  absolutely  accurate  approximation  of  the  cost  of  feed 
in  produccing  one  quart  of  milk ;  forty-two  per  cent,  of  the  price 
received  is  expended  in  feed.  In  other  words,  the  price  of  milk 
as  averaged  being  $.029:9  per  quart,  the  cost  of  feed  per  quart  is 
$.012588;  so  there  is  'one  cent  and  about  twenty-six  one-hun- 
dredths.  Now,  the  cost  of  labor,  maintenance  of  machinery  and 
teams  and  other  items  of  that  kind,  on  the  same  basis,  is  $.008656 
per  quart  for  this  period;  that  leaves  a  balance  of  slightly  over 
eighth-tenths  of  a  cent  per  quart  to  the  farmer  and  is  all  that  is 
left  to  pay  the  following  items1:  Taxes,  which  will  average  about 
$4  per  cow;  insurance,  all  repairs  to  buildings  and  plant,  all  the 
interest  on  plant  and  the  investment,  and  any  profit  there  may  be. 
Now,  in  my  opinion  there  are  very  few  farmers  who  have  any 
such  accurate  statistics  running  over  a  period  of  years  out  of  which 
it  is  possible  to  make  any  computation  of  cost,  and  in  my  judg- 
ment those  figures  are  substantially  accurate  results. 

The  referee. —  Do  you  figure  in  there  any  allowance  for  ad- 
ministration ?  A.  None,  whatever;  that  is,  none  whatever  for 
myself,  nor  supervising. 

Now,  I  would  like  to  add  to  this:  Since  1898  the  average 
price  of  milk  to  the  farmer  has  been  steadily  increasing,  and  tak- 
ing one  of  my  farms  for  all  those  eleven  years,  the  following  are 
the  prices  which  I  have  actually  received  for  my  milk  for  the 
year,  based  on  a  division  of  the  gross  receipts  from  the  milk  di- 
vided by  the  actual  number  of  quarts  sold ;  these  are  all  farm  year 
calculations ;  bear  in  mind  that  the  farmer  knows  nothing  about 


170  [-SENATE. 

the  calendar  year,  and  any  attempt  to  figure  upon  the  calendar 
year  will  result  in  errors :    In  the  year, 

1898-9,  April  1st  to  April  1st,  .021  cents  per  quart. 
1899-1900,  April  1st  to  April  1st,  .0231  cents  per  quart. 
1900-1,  April  1st  to  April  1st,  .0247  cents  per  quart, 
1901-2,  April  1st  to  April  1st,  .0237  cents  per  quart. 
1902-3,  April  1st  to  April  1st  .0268  cents  per  quart. 
1903-4,  April  1st  to  April  1st  .0257  cents  per  quart. 
The  average  of  those  six  years  is  .0'242  cents  per  quart. 
1904-5,  April  1st,  to  April  1st,  .0257  cents  per  quart. 
1905-6,  April  1st  to  April  1st,  .0293  cents  per  week. 
1906-7,  April  1st  to  April  1st,  .030-2  cents  per  quart. 
1907-8,  April  1st  to  April  1st,  .0346  cents  per  quart. 
1908-9,  April  1st  to  April  1st,  .0339  cents  per  quart. 

That  you  see  is  three  and  four-tenths  almost.  Those  were  the 
actual  prices  which  I  received  during  those  years  at  this  particular 
farm,  which  i*  fairly  standard.  Now,  during  that  same  period 
there  have  been  great  fluctuations  in  the  amount  of  feed  required 
to  produce  a  quart  of  milk,  and  there  have  been  some  fluctuations 
in  the  value  of  the  feed  in  comparison  with  the  price,  but  the  cost 
of  feed  in  1908  and  1909  was  the  highest  we  have  ever  known  it  to 
be  and  was  fifty  per  cent,  of  the  gross  receipts  of  the  price  received, 
so  that  upon  a  price  received  of  o.4  cents,  1.7  cents  went  to  feed. 
We  had  to  pay  that  year  as  high  as  thirty-one  and  thirty-two  dol- 
lars per  ton  for  feed;  and  it  took  just  as  many  pounds  of  feed 
to  make  a  quart  of  milk  that  year  as  it  did  any  other  year.  Now 
during  that  last  year  my  balance  per  cow  milking,  after  deducting 
my  feed  bills,  was  $63.95  per  cow,  while  the  preceding  year, 
1907-8,  the  feed  bills  were  only  about  thirty-six  per  cent,  of  the 
price  and  my  balance  per  cow  was  $100.86  per  cow  milking.  Now, 
as  a  general  result  of  these  figures,  and  my  own  experience  for 
thirty  years  in  farming,  my  observation  of  my  friends  and  neigh- 
bors who  are  around  me  in  all  directions,  I  want  to  say  that  in 
my  opinion  there  i*  no  approximate  cost  for  the  production  of 
milk  per  quart,  but  that  the  cost  will  vary  according  to  each  farm 
and  according  to  each  farmer  and  the  conditions  under  which  he 
is  operating,  and  also  according  to  the  quantities  of  milk  which 


STo.  45.]  171 

lie  makes  each  month  during  the  year,  in  my  opinion  the  one  most 
important  fact  with  reference  to  the  cost  of  milk  and  the  profit 
to  the  farmer  is  quality  of  the  cow,  with  the  single  exception  of 
the  number  of  pounds  of  feed  which  it  takes  to  make  a  quart  of 
milk.  A  ten-quart  cow  or  eleven-quart  cow  costs  no  more  than  an 
eight-quart  cow. 

The  Referee. —  Costs  no  more  to  feed  ?  A.  Costs  no  more  to 
produce  the  milk  from  one  cow  than  from  another;  it  costs  no 
more  to  produce  an  average  of  eleven  quarts  than  eight  quarts  per 
day  except  the  cost  of  the  feed.  The  difference  between  two  of 
my  farms  which  I  have  given  you  are  explained  in  this  way  - 
some  of  the  differences:  The  average  cost  per  cow  milking  per 
day  for  four  farms,  average  for  six  years,  wag  8.98  quarts  per 
day  per  cow  milking.  Xow,  two  of  those  farms,  however,  pro- 
duced an  average  of  8.28  quarts  per  cow  per  day  only.  During 
the  same  period  one  of  those  farms  produced  10.63  quarts  per  day 
per  cow  milking,  and  this  same  last  farm  for  an  average  of  eleven 
years  produced  10.39  quarts  per  day  per  cow  milking  during  the 
entire  eleven  years.  That  difference  of  two-and-a-half  quarts  per 
day  makes  a  difference  between  a  profit  and  no  profit.  I  would 
like  to  say  another  thing.  One  of  the  greatest  elements  of  expense 
—  the  two  great  elements  of  expense  to  the  farmers  in  producing 
milk  are,  first,  the  cost  of  feed,  which  has  more  than  doubled ;  I 
have  bought  the  same  feed  at  twelve  or  thirteen  dollars  per  ton 
that  I  am  now  paying  twenty-nine  or  thirty  dollars;  and  second, 
the  item  of  labor,  which  has  more  than  doubled  in  the  last  fifteen 
or  twenty  years,  on  my  judgment  owing  very  largely  to  the  opera- 
tions in  this  country  of  the  protective  tariff 'laws  which  have  at- 
tracted all  the  labor  possible  into  the  manufacturing  villages  where 
the  profits  of  business  permit  the  payment  of  higher  wages  than 
it  is  possible  for  the  farmer  upon  these  close  margins  to  compete 
with. 

The  Referee. —  How  do  you  account  for  the  fact  that  if  labor 
has  doubled,  and  with  double  the  price,  that  the  farmer  is  making 
now  more  than  he  did  twenty  years  ago?  A.  The  reason  is  this: 
We  are  farming  far  more  intensely.  Take  one  of  my  places  I 
have  in  mind,  I  am  carrying  on  an  average  of  seventy-five  or 
eighty  and  when  I  began  I  had  great  difficulty  in  carrying  twenty 


172  [SENATE 

or  twenty-five,  and  my  gross  receipts  are  double  from  the  same 
farms  what  they  were  thirty  years  ago,  twenty-five  years  ago. 

The  Referee.: —  Accounted  for  by  more  intelligent  handling  of 
the  soil  *  A.  Intense  farming.  I  am  making  milk  twelve  months 
of  the  year,  and  in  the  'old  days  we  made  it  eight  months.  Then 
Bordens  have  had  a  tendency  to  increase  the  price  of  labor  very 
much.  When  they  come  in  they  pay  high  wages  and  they  attract 
all  the  available  labor. 

I  want  to  add  this :  The  figures  which  were  testified  to  here 
on  the  last  session  by  Mr.  Scudder  with  reference  to  the  Burdens 
and  with  reference  to  the  Slawson-Decker  Company  are  absolutely 
valueless  and  absolutely  misleading,  because  they  are  absolutely 
incomplete  for  the  reason  that  the  fundamental  factor  necessary 
to  give  those  figures  the  slightest  value  is  lacking,  and  that  is,  the 
number  of  quarts  to  be  applied  to  those  figures.  Now,  if  Bordens 
are  delivering  three  million  (piarts  JXT  day,  then  those  figures  are 
a  very  small  figure  p<  r  quart.  If  they  are  delivering  four  million 
quarts  per  day,  they  are  very  much  less.  If  they  are  delivering 
two  million  (piarts  per  day,  they  are  very  much  higher.  Those 
figures  are  valueless  except-  the  actual  number  of  (piarts  of  milk 
purchased  by  the  Bordens  and  applied,  to  those  totals  are  also 
added  and  the  percentage  taken.  Now,  there  is  this  thing  to  be 
remembered,  that  for  every  forty  tpiarts  of  milk  delivered  and 
paid  for  by  creamery  men  or  milkmen  or  a  dealer,  he  never  find- 
over  thirty-eight  quarts.  Every  time  you  pour  milk  from  one 
vessel  to  another,  there  is  a  certain  amount  left  on  the  skin  of  the 
•can  or  the  bottle  or  on  the  surface.  When  yon  repeat  those  pro- 
cesses you  never  will  find  two-fortieths  or  one-twentieth  of  5  per 
cent.  Five  per  cent,  of  the  whole  business  is  never  to  be  found, 
so  that  y  in  have  got  to  get  back  to  the  quarts  bought  in  order  to 
have  any  correct  deductions  from  these  statistics. 

JOSEPH  A.  FERRIS: 

I  reside  in  Montclair,  X.  J.  I  have  been  in  the  wholesale 
milk  and  cream  business  since  I860.  My  present  place  of  busi- 
ness is  -l\v.\  Greenwich  street,  New  York,  under  the  corporate 
name  of  "  Ferris  Milk  £  Cream  Company."  I  began  business  in 
Brooklyn  by  buying  out  Brown  &  Bailey ;  sold  out  to  my  brother ; 
bought  milk  and  cream  from  Brown  &  Bailey;  went  into  the  con- 


Xo.  45.]  173 

densed  milk  business  with  S.  W.  Canfield  and  then  went  with 
the  Pullman  Car  Company;  then  returned  to  Brooklyn  and  en- 
tered business  again  with  Mr.  Canfield.  Borden's  superheated 
milk  patents  ran  out  and  I  arranged  with  Mr.  Canfield  to  buy 
milk  of  him  for  thirty  cents  a  quart.  Bordens  were  then  selling 
the  same  class  of  milk  at  forty-eight  cents  a  quart  and  we  began 
competition  with  Bordens.  Formerly,  we  had  sold  "  thin  milk  " 
and  people  thought  that  "  other  milk  "  being  thicker  and  heavier, 
was  better  than  the  thin  milk,  and  the  Buckley  boys  left  Bordens 
and  joined  us  and  we  were  then  first  in  the  field  of  the  super- 
heated milk  business.  I  have  known  Mr.  Rogers,  president  of 
Bordens,  since  1871,  at  which  time  we  were  both  drivers.  I  saw 
Mr.  Rogers  four  or  five  weeks  ago  at  my  office  in  Greenwich  street. 
After  some  conversation  with  Mr.  Rogers,  he  said,  "  Joe,  you 
know  that  there  is  no  trust  in  this  business."  "  Well,"  I  said, 
"  Mr.  Rogers,  I  don't  know  whether  you  call  it  a  trust  or  not  but 
I  have  only  to  take  what  I  hear  from  people  who  seem  to  have 
the  knowledge  of  what  they  are  talking  about,  that  there  is  some- 
think  in  it," 

All  the  people  in  the  milk  business  seem  to  be  down  upon  me 
except  Mr.  Beakes,  and  now  from  what  I  am  told,  I  guess  he  is- 
too.  Mr.  Rogers  did  not  say  why  he  called  to  see  me.  It  was 
natural  that  Mr.  Rogers  should  stop  and  see  me,  having  known 
each  other  for  so  many  years.  Mr.  Rogers  only  happened  to  stop 
and  see  me  as  he  was  passing  along  the  street.  I  did  not  expect 
him  to  call  and  see  me.  "  He  is  on  the  top  shelf  and  I  am  away 
down  at  the  bottom."  I  cannot  say  that  I  told  him  that  I  had  heard 
that  he  and  Mr.  Beakes  and  Mr.  Horton  met  over  in  Jersey  City. 
He  said  he  was  glad  I  was  not  in  the  retail  business.  I  have  never 
been  a  member  of  the  Consolidated  Milk  Exchange.  They  won't 
have  me  in  it.  Xor  am  I  a  member  of  the  Retail  Dealers'  Pro- 
tective Association.  I  have  had  no  dealings  with  the  association. 
]  have  had  dealings  with  the  Orange  County  Milk  Association  — 
bitter  competition.  I  would  be  willing  to  sell  milk  for  eight 
cents,  but  T  am  in  the  wholesale  business.  I  might  strike  two 
months  that  its  costs  pretty  near  that.  The  other  seven  are  in  the 
dealer's  favor,  but  my  experience  is  limited  in  the  retail  busi- 
ness. The  man  that  only  sells  a  few  bottle?  per  wagon  cannot 


[SENATE 

make  as  much  as  a  man  selling  300  or  400  quarts.     Mr.  Webb 
Harrison  suggested  our  going  into  the  milk  business  on  a  half  and 
half  basis,   he   to  furnish  the  money   and   the   milk.      He  then 
abandoned  me,    and  the  only   explanation   he  made  to  me  was, 
u  'Some  day  I  will  tell  you  why  I  didn't  go  in  with  you.77     Mr. 
Harrison  introduced  me  to  a  Mr.  Fay  en,  formerly  of  the  Mutual, 
and  finally  he  abandoned  going  in  with  me,.     I  had  several  deal- 
ings with  others,  and  by  various  devices,  these  parties  and  others 
were  discouraged  going  into  the  business  in  New  York.     Mr. 
Durland,  with  whom  I  had  a  contract  to  take  milk,  after  a  short 
time  telephoned  me,  "  I  am  awfully  sorry  Ferris,  but  I  can't 
send  you  any  milk  to-night  or  any  cream."     He  said  he  would 
arrange  with  another  man  to  ship  me  milk.     This  party  was  to 
ship  me  milk,  but  didn't  send  it  and  Mr.  Durland  said,  "  I  tell 
you.  Ferris,  they  had  a  man  out  here  on  Sunday  and  they  said 
if  they  shipped  any  more  milk  to  you  that  they  would  put  me  out 
of  the  business  in  Newark  as  well  as  New  York."     I  had  other 
troubles,    such   as  having  milk   shipped    two  weeks   after   I   had 
ordered  it  and  also  trouble  with  the  freight  station.     Some  diffi- 
culty about  handling  it,  as  I  had  no  ice  and  no  office.    In  August, 
1909,  I  had  a  meeting  at  the  Grilsey  House  with  several  men,  one 
from  the  country,  with  a  view  of  purchasing  milk  from  him.    We 
talked  over  the  conditions  here  in  New  York  and  we  agreed  that 
we  would  be  up  against  the  combination  and  would  have  a  hard 
time.     The  man  from  the  country  was  Mr.  Fayen,  the  same  man 
I  had  arrangements  with  before,  and  everything  fell  through.  He 
had  been  formerly  president  of  the  Mutual  and  he  said,  "  Whom 
do  you  mean  by  the  combination  ?  "     I  said.  "  The  Milk  Ex- 
change."    I  said,  "  Do  you  say  to  me  in  the  presence  of  these 
men  that  they  have  agreed   amongst   themselves  and  that  each 
other  shan't  interfere  with  each  other,  and  if  a  new  man  comes 
in  the  business,  do  you  say  that  they  will  put  him  out  of  the 
'business  ?  "     "  Well,  now,  he  says,  "  They  had  a  smart  lawyer 
down  there  in  Nassau  street  that  dTawed  up  these  things  and 
they    know    pretty    well     what    they    are    doing."        I     said, 
"  What  are  you  trying  to  do  ?    Are  you  trying  to  get  these  people 
in  jail  ?  "     He  says,  "  No."     But  he  said,  "  There  it  is."    Well, 
Mr.   Fayen  went  back  to  Vermont  and  I  never  heard  of  him 
since.     Then  I  tried  to  enter  business  with  Mr.  Jones. 


lsTo.  45.']  175 

Q.  Well,  now,  Mr.  Ferris,  will  you  tell  if  any  of  the  attempts 
to  take  trade  away  from  you  on  the  part  of  any  organization  after 
you  went  into  it  with  Mr.  Jones  ?  A.  I  had  great  difficulties  with 
the  McDermott  people  at  the  Mills  hotel.  Mr.  Ogden  Mills  tried 
to  help  me  but  McDermott  put  the  price  down  to  5  cents.  I  was 
celling  at  5  Mi  cents  and  I  met  McDermott's  price,  and  that  was 
3  cents  a  can  less  than  it  was  costing  us.  Then  McDermott  put 
the  price  to  4%  cents.  I  could  sell  milk  at  cost  but  not  below  it. 
•"  Well,  that  ended  me  with  McDermott." 

Q.  Can  you  give  any  evidence  where  a  number  of  dealers  have 
organized  in  any  way  to  compete  with  you  unfairly  ?  A.  Well,  I 
know  there  are  three  or  four  of  these  same  identical  people,  the 
Mutual,  the  Beakes  Dairy  Co.,  and  the  McDermott  people,  and 
the  Stevens  people,  have  not  only  met  my  prices,  but  went  lower. 

An  individual  dealer  is  justified  in  putting  his  prices  lower  to 
meet  my  prices  to  get  the  business,  if  he  can. 

THOMAS  A.  GORMAN: 

I  met  Mr.  Laemmle,  secretary  of  the  Consolidated  Milk  Ex- 
change, in  the  spring  of  1909,  at  the  city  hall,  in  the  aldermanic 
chamber,  where  an  ordinance  had  been  introduced  to  compel  milk 
dealers  of  Greater  New  York  to  pasteurize  the  milk  that  came 
into  the  city.  I  introduced  myself  to  him.  I  called  on  him  at 
Ms  office  a  few  days  later  in  Bleeker  street.  While  there,  we 
talked  over  the  milk  situation  and  Mr.  Laemmle  said  that  the  price 
•ought  to  be  raised,  — •  that  they  could  not  get  along  at  the  present 
price.  We  talked  over  the  matter  of  raising  some  money  for  a 
•campaign  of  education  of  the  public  with  a  view  of  securing 
nigher  prices.  He  said  he  was  Secretary  and  Treasurer  of  the 
Consolidated  Milk  Exchange.  I  met  Mr.  Beakes  about  ten  days 
later  at  Xo.  6  Harrison  street.  At  the  time  appointed,  to  meet 
;some  members;  I  was  there.  I  met  Mr.  Beakes,  Mr.  Comfort, 
Mr.  Conklin,  Mr.  Seller  and  Mr.  Hunterman. 

Q.  What  did  they  say?  A.  It  was  simply  in  the  general  dis- 
cussion that  these  series  of  articles  was  to  be  on  milk,  and  it  was 
to  be  an  educational  feature  and  lead  up  from  the  uses  of  milk  to 
the  dietetic  features  and  not  to  incur  it  in  any  particular  form, 
tcooking  of  milk,  or  pasteurizing  it,  but  simply  curing  milk  and 


176  [SENATE 

ultimately  to  take  and  get  a  price  that  would  be  better  than  what 
they  were  getting,  and  increase  the  price  of  milk.     They  never 
used  the  Exchange  in  any  way,  shape  or  form.      They  never  said 
"  the  Consolidated  Milk  Exchange.?    Probably  ten   days   after- 
wards, I  met  the  directors  again.     Practically  all  were  there,  I 
guess.     Mr.  Howell  and  Mr.  Slaughter  were  there.     The  discus- 
sion  at   this  meeting  was   along  the  same  line  as  before.      The 
money  that  was  thought  necessary  to  start  it  was  about  $5,000, 
and  then  increase  it  as  they  saw  fit.     Raines  of  principal  dealers 
were  written  out  as  in  Exhibit  2.     Mr.  Beakes  wrote  it  out,  and 
said  it  represented  US  per  cent,  of  the  New  York  milk  industry. 
Mr.  Laemmle  gave  me  a  list  of  some  of  the  larger  dealers;  there 
were  on  that  list  also;   including  the  Sheffield  Farms.     No,  not 
including   the   Sheffield   Farms   but   Bordens,    Mutual    Milk   and 
Cream,   Alexander.  Campbell    and    Km  pi  re   State   Dairy.      (This- 
list  was  marked  Exhibit  3.)      Mr.    Heakes  made  the  letters  op- 
posite the  name  of  dealers,  except  Sheffield  Farms.     I  called  on 
Mr.   Taylor  of  the  Bordens   Condensed  Milk   Co.    and  laid   the 
proposition  before  him.     He  smiled  and  looked  favorably  on  it 
and  I  told  him  his  amount  was  about  $500^00.     I  was  to  go  back 
to  see  him  again.     He  was  to  talk  with  others  and  "  he  thought 
this  campaign  of  education  would  result  in  the  public  being  edu- 
cated  ii])  to  a  higher  price  of  milk."     I  talked  with  Mr.  Loton 
Horton  of  the  Sheffield-Farms-Slawson-Decker  Co.  and  stated   to 
him  what  I  had  stated  to  others  and  he  said  lie  would  see   Mr. 
Beakes  about  it,     I  knew  it  was  not  a  matter  to  be  made  public, 
although  very  little  was  said  about  it.     I  saw  Mr.  Conklin  of  the 
Orange  County  Milk  Association  and  stated   the  proposition  to 
him.     He  said  he  would  consider  it.     I  told  him  his  share  was 
$100.00.      I  called   on  the  Standard    Dairy   Co.     Mr.  Huterman 
represented  it.     I  went  up  to  the  office  of  the  company  and  was 
introduced  to  the  treasurer,  and  the  treasurer  signed  the  name, 
u  Standard  Dairy  Company/'     I  told  him  their  assessment  was 
$100.00  and  he  agreed  to  pay  it.     I  saw  the  Seiler  Brothers  at 
the  board-room  of  the  Consolidated  Exchange.     Mr.  Seiler  seemed 
to  think  well  of  educating  the  public  to  a  higher  price  of  milk. 
JJe  seemed  satisfied,  as  did  all  of  the  six  first  persons.     "  It  was 
a  unanimous  proposition  so  far  as  the  six  were  concerned." 


Xo.  45.]  177 

Q.  Well,  was  the  value  of  milk  as  a  food,  or  the  advancing  of 
the  price  the  more  important  subject  of  the  conference?  A.  The 
object  was  to  exploit  the  dietetic  features,  as  well  as  the  other 
features  of  the  milk  and  then  show  how  good  it  was  and  every- 
thing like  that,  and  then  the  public  would  be  in  a  receptive  shape 
to  take  and  pay  more  for  it.  That  was  the  object  to  take  and 
have  them  in  such  shape  that  they  were  ready  to  take  and  feel 
pleasant  and  pay  for  it  and  more. 

Mr.  Laemmle  of  the  Laemmle  Dairy  Company  agreed  to  it.  1 
asked  Mr.  Beakes,  he  being  the  principal  one,  to  start  the  list  so 
that  I  could  go  straight  ahead.  I  saw  Mr.  Cavanaugh  of  the 
Mutual  Milk  and  Cream  Company  several  times.  He  seemed 
to  think  well  of  it.  I  stated  to  him  the  purpose®,  the  same  as  to 
others.  He  said  ;he  would  take  it  up  with  the  directors..  The 
people  generally  said  "  They  would  see  Mr.  Beakes."  "  Mr. 
Beakes  naturally  had  started  the  thing  and  Mtr.  Beakes  was 
known  among  the  milk  trade  as- being  one  of  the  brightest  men  in 
it.  and  one  of  the  best  men  in  it,  and  one  of  the  solidest  men  in  it, 
and  a  man  Avho  had  done  things  in  the  milk  trade  and  for  the 
milk  trade."7  Some  of  the  milkmen  spoke  unfavorably  of  the 
plan,  such  as  Mr.  Campbell.  I  called  once,  but  did  not  come 
back,  at  the  Leadman  Dairy  Com/patty.  I  saw  Mr.  Sam  Levy 
and  he  said  he  would  see  Mr.  Beakes.  All  the  dealers  that  I  had 
srcii  expressed  themselves  favorable  to  it.  I  saw  Mr.  Law  of  the 
Briareliff  Farms.  After  putting  the  matter  before  him,  he 
thought  it  would  be  a  good  plan  but  did  not  commit  himself  one 
way  or  the  other.  He  invited  me  to  come  again.  Mr.  Ryan,  of 
the  Me  Dennett  Dairy  Company  did  not  commit  himself.  I  saw 
the  Sanfoird  Hairy  Company.  I  do  not  recall  with  whom  I 
talked.  They  were  favorable.  I  saw  the  T.  V.  Smith  &  Sons 
and  one  of  the  Smith  Brothers.  They  thought  well  of  it  and  in- 
vited me  to  come  back.  Well,  I  said,  "  It  ought  to  be  done."  I 
saw  J.  A.  llowell  &  'Company  and  talked  with  Mr.  J.  A.  HowelL 
''"'  He  was  very  favorably  impressed-  with  it  and  said  he  would  go 
in  it."  I  saw  some  of  the  other  parties  mentioned  -on  the  list 
and  some  of  them  I  did  not  see.  The  period  that  I  worked  on 
this  proposition  was  over  two  months.  In  the  latter  part  of  the 
winter  of  1(,)09.  I  saw  Mr.  Comfort  of  the  Reid  Ice  Cream  Com- 


ITS  [SENATE 

pany.  He  was  in  favor  of  it,  but  lie  was  in  favor  of  getting  more 
than  one  newspaper  into  it.  He  thought  it  would  be  better  to 
have  more  than  one  paper  publish  it.  I  saw  Alexander  Campbell 
in  reference  to  it  at  his  office  in  Brooklyn,  He  said  he  didn't 
want  any  advertising  or  anything  done  if  his  name  was  not  on  it. 
If  he  was  paying  for  anything,  he  wanted  to  have  his  name  on  or 
in  it.  I  saw  both  Rushmores  and  they  told  me  to  come  back.  I  saw 
several  other  small  dealers  and  they  were  favorable.  I  got  the 
ballot  book  of  the  Consolidated  Milk  Exchange  from  Mr.  Howell 
of  J.  A.  Howell  &  Company  of  Jersey  City.  He  said  if  I  would 
use  that  I  would  get  to  the  bulk  of  the  milk  dealers.  It  was  a 
good  reference. 

(Ballot  received  in  evidence  and  marked  Exhibit  4.) 

Q.  Is  this  movement  still  on?  A.  Not.  so  far  as  I  am  con- 
cerned, no  sir. 

Q.  Why  was  it  you  gave  up  going  around  and  seeing  these 
people?  A.  Why,  I  have  seen  enough  to  show  the  newspaper, 
that  the  movement  was  a  go.  That  there  was  enough  evidence 
to  show  that  it  would  go,  that  is,  more  than  one-half  of  the  amount 
was  promised  and  the  chance  for  the  paper  to  take  and  'phone  or 
write  certain  concerns  there  and  they  would  see  just  what  they 
had  told  me,  but  they  didn't  care  about  'being  on  top  of  that  list. 
I  prepared  no  article  on  the  value  of  milk  as  a  food. 

Q.  Then  it  was  not  because  of  any  particular  knowledge  that 
yon  have  of  chemistry  or  of  the  medical  properties  of  milk  that 
you  were  brought  into  the  thing?  A.  No,  only  the  coinage.  It 
was  simply  — 

Q.  Will  you  go  on  with  your  answer  and  tell  why  it  was  that 
you  gave  it  up  ?  A.  Why,  I  made  these  two  calls  to  start  this  sub- 
scription going  and  I  saw  Mr.  Beakes  and  I  saw  the  Standard 
Dairy,  and  they  both  signed  and  I  went  back  to  the  office  and  I 
reported  to  the  newspaper,  and  I  had  arranged  on  a  certain  com- 
mission basis,  the  same  as  a  free  lance,  to  take  that  or  any  other 
thing  and  go  ahead  with  it,  and  I  wanted  to  get  my  commission, 
but  they  sai-d  there  was  nothing  doing  until  $5,000  had  been  put 
up  in  cash,  real  money.  So  I  could  not,  after  a  couple  of  months 
work,  and  things  like  that  —  I  couldn't  see  it  that  way,  but  even 
at  that  I  followed  it  up  and  saw  some  of  the  concerns  afterward 


Xo.  45.]  179 

.and  tried  to  prove  that  they  were  there  ready  to  put  up  their 
money  ^nil  the  thing  could  be  started. 

Q.  You   dropped  it   because  your  commission  was  not  paid? 
A.  Yes,  sir,  that  is  the  sum  and  substance  of  it. 

H.  OSCAR  HALE  : 

I  reside  at  Norwich  in  the  county  of  Chenango,  about  200 
miles  from  New  York.  I  have  had  twenty-five  years  experience 
in  producing  milk  and  produced  the  same  up  to  about  twelve 
years  ago.  I  am  now  in  the  feed  business.  I  have  a  knowledge 
of  the  conditions  governing  the  production  of  milk  at  the  present 
time  from  association  with  the  farmers  in  my  county.  I  have 
a  statement  here  from  one  who  is  considered  one  of  the  best 
farmers  in  this  section.  He  produces  certified  milk  and  his 
milk  goes  to  Isaac  W.  Rushmore  Company  in  Brooklyn.  This 
farm  is  situated  on  the  Chenango  river  about  three  miles  from 
the  village  of  Norwich.  They  keep  on  an  average  about  forty- 
five  cows.  The  average  cost  of  producing  a  quart  of  milk  in 
1909  was  just  about  three  cents  a  quart,  also  taking  into  con- 
sideration the  expense  of  keeping  the  dairy  in  condition,  which 
I  see  he  left  out  of  his  statement.  I  think  the  average  cost 
of  production  would  be  about  three  and  one-third  cents.  From 
his  figures  I  see  that  he  made  a  profit  of  about  thirty-five  one- 
hundredths  of  a  cent  per  quart.  Chenango  county  is  a  Borden 
county.  The  price  of  milk  for  the  county  is  really  made  on  the 
Borden  price.  They  make  their  prices  beginning  with  March  per 
hundred  pounds.  They  are  March,  $1.40;  April,  $1.40,  May, 
$1.15  ;  June,  $.95  ;  July,  $1 ;  August,  $1.25  ;  September,  $1.40  ;  Oc- 
tober, $1:80;  November,  $1.90;  December,  $1.95,  January,  $1.95, 
and  February,  $1.90.  I  think  that  the  producers  should  have  an 
average  of  four  cents  a  quart  for  the  year  in  order  to  make  a  fair 
profit  on  the  investment.  I  think  if  they  obtained  five  cents 
in  winter  and  three  cents  in  summer,  they  could  make  a  fair 
profit.  About  eighteen  years  ago  two  cents  was  paid  for  six 
months  and  three  cents  for  the  other  six  months  and  the  farmers 
made  money,  but  in  those  days  feed  was  costing  about  one-third 
of  what  it  does  to-day.  Most  of  the  milk  in  my  county  is  deliv- 
ered to  Bordens  and  the  price  is  made  on  their  price.  In  the 
months  of  June  and  July  Rushmore  gave  twenty  cents  a  hundred 


ISO  [SENATE 

less  than  the  Bordens,  and  for  November  and  December  he 
paid  twenty  cents  a  hundred  more  than  Bordens,  but  they  aver- 
age about  the  same  as  Bordens.  Rushmore  had  a  short  form  of 
written  contract  which  the  producer  signed.  Before  Bordens 
came  to  my  county  there  was  only  one  month  in  six  that  they 
paid  as  high  as  two  cents  a  quart,  that  was  about  nine  years 
ago,  and  they  never  paid  over  two  cents  at  that  time.  They  have 
fixed  an  arbitrarily  low  price  in  that  community  every  year 
when  they  were  able  to  control.  I  do  not  believe  that  the  price 
of  milk  could  be  put  up  as  it  is  at  present  and  held  there  with 
no  one  cutting  h  unless  th<  r<-  \va>  a  combination.  I  have  an 
idea  that  Boadens  really  make  the  price  of  milk  and  the  Con- 
solidated Milk  Exchange  follows  them.  I  presume  the  Con- 
solidated Milk  Kxchaniio  price  controlled  my  county  before  the 
Ilordcns  came  there,  except  the  section  that  Kushmore  had.  I  have 
supposed  that  there  was  an  agreement  among  the  Consolidated 
"Milk  Exchange  members  that  they  would  not  pay  more  to  the 
farmer  than  the  price  that  Avas  fixed  by  the  board  of  directors  of 
the  Exchange.  That  wras  the  general  understanding  among  the 
farmers  in  my  section.  I  have  no  personal  knowledge  that  would 
lead  me  to  l>elieve  there  was  a  combination  among  the  dealers  of 
X<  \v  York  to  raise  the  price  of  milk  from  eight  to  nine  cents 
a  quart  on  bottled  milk  on  or  about  \ovember  1,  1909,  except 
from  the  fact  that  they  all  raised  it  at  the  same  time,  the  same 
amount  on  the  same  day.  As  to  the  situation  under  which  the 
producer  is  paid  three  and  one-third  cents  on  an  average  through- 
out the  year  for  a  quart  of  milk,  and  the  middle  man  is  paid 
five  and  two-thirds  for  delivering  that  milk  to  the  consumer,  I 
think  that  comes  from  the  fact  that  the  middle  man  makes  the 
prices  both  ways.  He  makes  the  price  to  the  producer  and  also 
to  the  consumer,  the  consumer  and  producer  having  nothing  to 
say  about  the  price.  I  do  not  know  of  any  other  way  in  which 
the  middle  men  could  control  the  price  except  by  getting  together. 
I  consider  five  and  two-thirds  cents  a  quart  that  the  middle 
man  obtains  as  exorbitant  when  compared  with  three  and  one- 
third  cents  a  quart  to  the  producer,  that  is,  with  the  amount  of 
work  that  each  does  and  the  amount  invested.  I  think  by 
running  milk  through  a  separator  you  make  it  cleaner  than  by 


No.  45.]  181 

running  it  through,  cotton  cloth.  The  separator  will  take  out 
more  dirt  than  is  possible  in  any  other  way.  I  had  one  year's 
experience  with  selling  milk  before  Rushmore  came  to  Xorwich, 
and  they  did  not  have  any  separator  but  they  set  their  night's 
milk  and  skimmed  it,  and  the  morning's  cans  were  filled  up  two- 
thirds  full  and  the  skimmed  milk  put  in.  I  have  seen  them  do 
that.  Farmers  in  the  west  to-day  are  getting  four  times  more 
for  their  corn  and  wheat  than  they  did  a  few  years  ago,  which 
may  make  the  cost  of  producing  milk  more  than  it  was  at  that 
time.  There  used  to  be  co-operative  creameries  in  my  section 
but  the  large  dealers  have  driven  them  out,  although  they  are 
beginning  now  to  build  co-operative  creameries  again.  The  Bor- 
dens  have  bought  up  a  good  many  in  our  county.  When  they  buy 
them  up  that  shuts  off  all  competition.  I  think  that  the  farmers 
in  my  county  that  are  selling  to  Bordens  at  their  prices  are  about 
selling  at  cost.  I  think  the  price  for  the  winter  months  is  nearer 
right  than  the  price  for  the  summer  months.  I  think  a  man  that 
has  a  good  dairy  of  winter  cows  can  make  more  money  during 
the  winter  months  at  the  price  they  are  paying  to-day  than  he 
can  for  the  summer  months.  I  got  a  man  that  had  a  dairy  of 
eight  fresh  cows  for  the  last  month.  His  check  was  $177,  as 
he  got  the  extra  twenty  cents  at  Rushmore's  shipping  station 
over  and  above  the  Borden  price.  He  had  eight  cows  and  his 
feed  cost  $37.20,  and  I  figured  his  hay  at  $16  a  ton,  and  allowed 
thirty  pounds  per  cow  a  day,  and  that  left  him  a  balance  of  $81 
for  profit  for  his  own  labor.  This  hay  he  did  not  raise.  He 
cut  the  hay  on  shares,  so  he  had  to  charge  that  up  whatever 
the  hay  was  worth.  That  left  him  a  profit  of  $10  a  piece  on 
those  cows,  after  feeding  the  hay  and  the  grain.  I  do  not  think 
there  is  a  flush  of  milk  in  my  locality  at  the  present  time.  I 
account  for  the  flush  of  milk  in  ISTew  York  by  reason  of  the  fact 
that  the  price  was  raised.  I  talked  with  Rushmore  the  other 
day  and  I  am  of  the  opinion  from  what  he  said  that  all  the 
dealers  in  New  York  are  going  to  return  to  the  eight  cent  price 
on  the  first  of  April.  Milk  was  worth  in  the  six  months  last 
summer  forty  cents  a  hundred  above  Bordens'  price  to  make  up 
into  butter  and  cheese,  and  if  a  farmer  would  establish  his  cream- 
eries generally  he  would  have  a  means  of  establishing  competi- 


382  [SENATE: 

tion  until  some  one  could  control  the  cheese  market  together 
with  the  milk  market.  There  would  have  to  be  a  combination 
between  the  butter  and  cheese  people  and  those  controlling  the 
milk  market  in  order  to  eliminate  competition  so  far  as  the  far- 
mer was  concerned,  and  there  could  be  no  agreement  in  that  way 
if  these  cheese  factories  and  butter  factories  are  run  upon  the 
co-operative  plan  and  the  farmer  got  just  what  the  milk  would 
be  worth  in  butter  and  cheese.  As  I  understand  it  the  Con- 
solidated Milk  Exchange  is  a  combination  of  dealers  in  New 
York,  and  the  Exchange  price  means  that  they  will  give  just  so 
much  for  the  milk  for  that  month  and  no  more,  and  they  make 
the  price  once  or  twice  a  month  as  they  see  fit.  It  is  a  disad- 
vantage to  the  farmer. 

Q.  Will  you  state  why  it  is  a  disadvantage  ?  A.  Well,  I  can. 
remember  when  the  large  part  of  the  milk  was  purchased  from 
Dutchess  county,  down  the  Harlem  road  to  Orange  county,  and 
at  that  time  a  man  had  a  dairy  of  forty  or  fifty  cows,  he  could 
go  down  to  New  York  and  sell  his  milk  and  get  a  good  living 
price.  He  made  the  price.  The  dealer  down  there  paid  him  his- 
price.  Well,  he  had  nothing  whatever  to  say  about  it  to-day. 
He  has  got  eighty  cows  and  the  Exchange  makes  the  price  for 
a  certain  month,  he  can  take  his  milk  or  he  can  throw  it  in  the 
gutter.  He  is  under  their  control.  He  has  not  a  word  to  say 
about  it.  I  think  the  result  for  the  farmer  under  the  present 
system  is  very  bad. 

BENJAMIN  S.  HALSEY: 

I  am  second  vice-president  of  the  Sheffield  Farms  Slawson- 
Decker  Company  and  have  been  such  for  about  three  years  in 
April.  I  have  been  a  director  since  the  incorporation  of  the- 
company.  Only  as  one  of  the  directors,  I  might  be  called  upon 
to  pass  the  question  of  fixing  the  price  that  my  company  will 
charge  the  consumer  for  milk.  I  was  not  consulted  at  all  in  refer- 
ence to  raising  the  price  of  milk  on  or  about  November  1,  1909, 
from  eight  cents  to  nine  cents  a  quart.  Mr.  Horton  had  charge 
of  that  entirely.  He  afterward  referred  it  to  the  directors  and 
it  was  approved.  I  think  the  matter  was  discussed  informally 
in  September,  whether  it  should  be  done  October  first  or  not,  on 
account  of  the  increased  price  to  the  producer.  I  don't  remem- 


No.  45.]  183 

ber  coming  to  any  definite  conclusion.  There  was  no  suggestion 
that  we  attempt  to  co-operate  with  any  dealers  to  raise  the  price 
of  milk.  I  don't  know  any  of  the  officers  or  directors  of  Borden's- 
or  of  the  Mutual  Milk  and  Cream  Company,  except  I  used  to 
know  Mr.  Hannahs,  of  the  Mutual.  I  know  Mr.  Beakes  of  the 
Consolidated  and  Mr.  Jordan,  Mr.  Smith  and  Mr.  Laemmle.  I 
have  met  one  Harrison.  The  Dairymen's  Manufacturing  Com- 
pany I  know  as  a  corporation.  I  know  L.  L.  Campbell. 

Louis  A.  HAMILTON: 

I  reside  at  the  Plaza  hotel  and  am  «a  director  of  Borden's  Con- 
densed Milk  Company.  I  have  been  a  director  since  1902.  Never 
been  an  officer  of  that  company.  I  take  no  active  part  in  the 
management  or  the  conduct  of  the  company.  I  attend  the  meet- 
ings of  the  directors,  but  was  not  in  any  meeting  during  the 
month  of  October,  1909.  I  don't  remember  <any  discussion  that 
took  place  in  the  meeting  of  the  board  of  directors  in  reference 
to  the  advisability  of  the  necessity  for  raising  the  price  of  milk 
on  November  1,  1909.  I  know  of  no  agreement  between  my  com- 
pany and  the  other  companies  to  raise  the  price  of  milk  at  that 
time.  I  never  talked  with  any  one  in  reference  to  advancing 
the  price.  I  know  Mr.  Harrison  of  the  Consolidated  Milk  Ex- 
change. It  is  about  ten  years  since  I  saw  him.  I  don't  know  any 
one  connected  with  the  Sheffield  Farms  Slawson-Decker  Company 
or  with  the  Mutual  Milk  and  Cream  Company.  I  know  nothing 
about  standardizing  the  milk  with  the  separator  and  never  heard 
about  a  campaign  of  education  to  educate  the  public  in  obtaining 
higher  prices  for  milk. 

WEBB  HARRISON: 

I  am  in  the  creamery  business  'and  reside  at  Middletown,  N» 
Y.  TTave  been  in  business  six  or  seven  years.  We  run  creameries 
and  buy  the  milk  from  the  farmer  and  sell  it  to  the  retailer,  or 
what  we  term  wholesale  and  retail.  Might  be  called  jobber.  I 
also  have  a  creamery  in  Seward,  in  Scoharie  county,  and  one  at 
Home,  N.  Y.,  and  one  at  New  Centreville,  N.  Y.  Our  milk  is 
sold  at  the  platform  f.  o.  b.,  and  consigned  to  the  people  here 
or  wherever  we  sell  it.  Sometimes  we  sell  in  Albany  and  various 
places.  We  take  the  milk  in  at  a  creamery  and  either  bottle  it 


IS-t  [SEX  ATE 

or  ship  it  in  cans,  >as  we  can  get  it,  and  sometimes  in  a  fiush  of 
milk,,  we  make  cheese  or  butter  or  cream,  whatever  we  think  is 
the  most  advantageous  to  us,  when  we  have  more  than  we  can 
sell.  We  average  per  day  about  150  to  22  cans.  I  am  a  stock- 
holder in  the  Consolidated  Milk  Exchange  and  have  been  for  six 
or  seven  years.  I  was  ia  member  of  the  old  Milk  Exchange,  Lim- 
ited. I  have  been  an  employee  of  Borden's,  that  was  eighteen 
years  ago.  I  actually  attended  meetings  of  the  stockholders  or 
dim-tors  of  the  Consolidated  Milk  Exchange  at  6  Harrison 
.street.  The  annual  meeting  was  held  in  Xew  Jersey.  I  should 
say  the  real  object  of  the  ( 'onsolidated  Milk  Exchange  was  to  fix 
the  values  and  talk  over  the  general  conditions  of  the  market, 
the  same  as  any  other  Exchange.  Explaining  just  how  we  use 
the  values  fixed  by  the  Consolidated  Milk  Exchange  in 
our  business,  I  would  say  at  the  time  the  monthly 
meeting  which  we  know,  we  always  rather  keep  tract  of  them, 
and  after  the  meetings  we  find  out  if  there  has  been  any  change, 
by  telephoning  to  one  of  the  directors  or  otherwise,  and  then  we 
send  a  notice.  The  way  I  do,  I  send  a  notice  to  the  creamery 
which  will  rea.d,  "Wo  will  pay,  starting  from  this  date  until 
further  notice,  so  much  a  quart,  so  much  a  can,  so  much  a  hun- 
dred, as  the  case  may  lie,"  and  that  is  based  on  the  price  as  fixed 
by  the  board  of  directors  of  the  Consolidated  Milk  Exchange.  I 
am  buy  ing  milk  at  the  present  time  at  all  my  creameries  at  values 
•established  by  tho  Consolidated  Milk  Exchange.  If  a  farmer 
should  come  to  me  and  said  he  wished  to  deliver  milk  to  me  and 
wanted  to  know  on  what  basis  it. would  be  delivered,  I  would 
say,  "  L  will  pay  you  Exchange  price."  In  some  cases,  if  he  was 
situated  near  Bordens  he  might  want  to  base  his  on  Bordens 
price,  and  if  we  agreed  011  that,  we  would  do  it.  I  think  Bordens 
and  the  Exchange  price  will  average  about  the  same.  Bordens  is 
made  every  six  months  and  the  Exchange  price  is  made  at  reg- 
ular meetings,  as  I  understand,  of  the  board  of  directors  for  that 
month,  and  if  they  think  a  necessity  for  a  change  arises  during 
the  month,  they  have  a  special  meeting.  I  am  a  subscriber  to  the 
Milk  'Reporter.  Yes,  there  are  other  bases  of  selling  except  the 
Bordens  and  Exchange  prices.'  There  is  a  manufacturer's  price, 
which  cuts  quite  a  figure  sometimes  for  butter  and  cheese.  I 


Xo.  45.]  185 

mean  a  manufacturer  who  is  located  in  the  milk  shipping  ter- 
ritory, especially  in  the  northern  part  of  the  State,  where  you 
are  located  next  to  the  manufacturer,  you  have  got  to  consider  him 
in  your  price.  When  cheese  is  very  high  you  have  to  pay  more; 
you  have  got  to  get  above  your  Exchange  price.  If  it  is  low,  you 
get  a  little  below,  you  follow  him.  I  should  think  there  is  about 
as  much  milk  lx>ught  on  the  Bordens  price  as  on  the  Exchange 
price,  if  any,  a  little  bit  in  favor  of  Bordens.  I  would  say  that 
more  than  90  per  centum  of  the  milk  sold  to  retailers  of  Xew 
York  city  is  sold  at  either  Bordens  or  the  Exchange  price.  Bor- 
dens  price  and  the  Manufacturer's  price  is  always  considered 
when  fixing  our  value.  Accounting  for  the  fact  of  the  raise  in 
price  from  eight  cents  to  nine  cents  for  bottled  milk  was  made 
on  or  about  November  1,  1909,  as  I  understand  it;  Borden  gave 
out  their  notice  about  three  days  in  advance,  and  the  rest  were 
all  ready  to  take  advantage  of  it;  they  kneAV  if  Bordens  put  their 
signs  out  there  wouldn't  be  any  cutting  under  and  taking  the 
other  fellow's  trade,  as  it  were",  so  everybody  fell  in  line.  It 
would  seem  to  me  as  if  Borden  really  has  the  power  to  raise  or 
lower  the  price  of  milk  in  Xew  York  city  on  account  of  its  vast 
business  and  could  compel  other  dealers  to  follow  the  lead.  I 
advanced  my  price  to  retailers  on  November  1st  one-quarter  of  a 
cent  per  quart.  I  think  that  is  it,  I  am  getting  one-quarter  of  a 
cent  a  quart  more  for  my  milk  than  I  did  the  same  time  last 
year.  Our  expenses  are  more,  the  care  of  milk  principally;  the 
requirements  of  the  Board  of  Health,  ,and  caps  and  various  other 
things  that  we  have  to  use.  For  bottled  milk  I  am  getting  five 
cents  at  present,  f.  o.  b.  cars  at  the  station.  The  retailer  to 
whom  I  sell  the  milk  has  to  pay  a  little  over  a  cent  a  quart  for 
freight  and  about  a  cent  a  quart  for  delivery.  The  bottles  are 
supplied  by  the  dealer  to  whom  I  send  milk.  In  the  months  of 
May  and  June  all  over  five  cents  that  the  retail  dealer  gets  would 
be  profit.  The  retail  dealer  has  got  to  take  into  consideration  also 
the  bottle,  which  costs  seven  cents,  and  a  bottle  will  only  make 
ten  trips.  In  one  sense  of  the  word,  it  costs  the  large  dealer 
more  to  deliver  the  milk  than  the  small  dealer.  The  average  small 
dealer  usually  runs  a  little  store  and  he  connects  it  all  up  to- 
gether, does  all  of  his  own  work,  and  in  this  way  runs  his  busi- 


186  [SENATE 

ness  a  great  deal  more  economically;  has  no  bookkeeper  or  any 
office  expenses.  I  should  think  that  in  the  months  of  May  and 
June,  that  all  above  six  cents  a  quart  that  the  retail  dealer  gets 
would  be  profit,  including  bottles  and  breakage.  At  the  price 
I  am  selling  now,  five  cents,  and  adding  a  cent  for  freight  and  a 
cent  for  delivery  and  a  cent  for  breakage,  that  would  make  eight 
cents  a  quart,  and  if  milk  was  selling  at  nine  cents,  it  would  give 
a  cent  a  quart  profit  at  12%  per  cent.  I  suppose  I  am  .a  member 
of  the  Milk  Dealers  Protective  Association.  Their  principal 
objects  seem  to  be  to  pick  up  cans  and  get  them  back  when  they  go 
astray.  I  am  not  interested  in  that,  because  I  ship  my  milk  from 
the  factory.  I  pay  dues  to  this  society  according  to  the  number 
of  cans  as  I  ship.  About  fifteen  cents  a  can.  G.  C.  Weatherhorii 
is  secretary.  They  used  to  send  a  letter  out  for  these  dues.  The 
last  letter  I  received  was  some  time  in  July.  I  was  then  treasurer 
of  the  Castleton  Dairy  Company  and  the  letter  is  in  their  files. 
The  checks  were  made  out  to  Weatherhorn.  The  Castleton  Dairy 
Company  is  located  at  M  iddh  i<>\vn,  X.  Y.  In.  reference  to  the  dead 
wagon,  I  have  heard  talked,  that  if  a  fellow  was  cutting  in  on 
another  man's  trade,  they  would  have  this  man  on  a  dead  wagon 
go  around  and  see  him  and  see  if  he  wouldn't  stop  it,  and  then 
if  he  would  not  stop  it  they  would  send  this  fellow  around  to  de- 
liver to  customers  at  a  cheaper  price  and  cut  in  on  his  trade,  That 
is  the  way  I  understood  it  and  that  is  only  hearsay.  I  have  heard 
that  there  have  been  lots  of  milkmen's  horses  poisoned.  As  to  why 
the  New  Jersey  Zinc  Company  is  a  stockholder  in  the  Consoli- 
dated Milk  Exchange,  I  think  that  would  be  ancient  history  in  the 
milk  business.  When  the  milk  business  was  consolidated  they 
offered  one-half  of  the  stock  to  the  farmers.  At  that  time  the  New 
Jersey  Zinc  Company  was  quite  a  large  producer  of  milk,  and  I 
have  forgotten  the  gentleman's  name,  although  I  knew  him  at  the 
time,  he  subscribed  for  this  stock,  and  he,  I  think,  died  or  went 
out  of  business,  and  the  assessment  has  never  been  paid  against  the 
stock.  That  is  the  way  it  came  to  stand  in  their  name.  At  that 
time  the  New  Jersey  Zinc  Company  was  engaged  in  the  milk  busi- 
ness. They  had  a  large  farm  and  the  manager  of  that  farm  took 
the  stock  in  the  name  of  the  New  Jersey  Zinc  Company.  That 
was  in  1894  or  1895,  when  the  reorganization  was  made.  At  the 


'No.  45.]  187 

time  the  Milk  Exchange,  limited,  was  driven  out.  At  the  reor- 
ganization they  offered  half  of  this  Exchange  stock  to  the  farmers, 
and  they  did  all  they  could  to  get  the  farmers  to  subscribe  for  one- 
half  of  the  stock.  Yes,  I  have  attended  meetings  of  the  board  of 
directors  of  the  Consolidated  Milk  Exchange  at  which  they  fixed 
the  prices  of  milk.  They  called  the  meeting  to  order  and  then 
they  would  take  an  informal  ballot  what  they  would  deem  the 
value  of  milk  at  that  time,  and  then  they  would  call  up  the  in- 
formal ballot,  and  then  they  would  go  around  the  table  and  ask 
each  one  their  opinion.  Some  would  give  one  thing  and  some 
another.  One  wanted  it  down;  he  had  been  in  the  country  and 
there  was  a  big  lot  of  grass,  etc.,  and  manufacturing  conditions 
were  so  much  and  all  those  things;  and  if  he  wanted  to  raise  it 
and  the  conditions  were  different,  he  would  tell  his  opinion,  and 
that  is  the  way  all  the  way  around,  and  then  they  would  take  the 
formal  ballot.  You  could  not  keep  cream  as  long  in  the  country 
as  you  could  in  some  of  the  freezers  in  the  city  where  they  have 
a  regular  refrigerator.  There  it  is:  possible  to  freeze  it  and  as  long 
as  they  keep  it  frozen  it  will  be  cream,  but  it  does  not  go  out  in 
the  shape  that  you  can  use  it  for  anything,  only  manufacturing 
purposes.  I  don't  think  they  keep  cream  two  or  three  months. 
They  probably  put  the  cream  away  in  June  and  use  it  in  July 
and  August.  The  difference  in  price  of  cream  in  June  and  August 
would  probably  be  $1  a  can.  For  those  two  months  there  might 
be  a  charge  of  thirty-five  or  forty  cents  for  ice.  I  know  of  some  of 
the  ice  cream  dealers  that  do  it.  The  Weed  Ice  Cream  Company 
does  it.  I  think  that  practice  would  be  confined  largely  to  the  ice 
cream  people.  I  believe  that  Borden's  price  was  always  taken  into 
consideration  in  fixing  the  Exchange  price.  I  don't  know  of  there 
being  any  agreement  among  the  milk  dealers  previous  to  the  1st 
of  November  to  raise  the  price  of  milk.  Erom  my  knowledge  of 
the  milk  business  and  the  general  condition  of  the  milk  business, 
I  think  that  Borden's  is  in  a  very  much  more  advantageous  posi- 
tion to  handle  milk  and  not  lose  anything,  than  the  small  dealer  in 
the  flush  of  the  season,  because  when  there  is  a  flush  of  milk  they 
sell  what  they  can  and  what  they  can't  they  can,  and  as  con- 
densed milk,  it  brings  the  price.  If  at  their  bottling  plants  they 
have  a  surplus  of  milk  they  draw  it  to  the  condensing  plant. 


188  [SENATE 

They  have  a  certain  plant  at  Middletown,  they  are  drawing  in 
there  two  or  three  or  four  hundred  cans  of  milk  a  day.  Regarding 
the  conditions  under  which  the  Bordens  are  able  to  fix  a  price 
six  months  ahead  which  conies  very  close  to  what  the  Exchange 
price  is  for  those  separate  months,  Bordens  go  into  all  the  details, 
they  think  they  do,  for  six  months,  and  then,  of  course,  the  Ex- 
change from  time  To  time  fixes  their  value  of  milk,  and  some- 
times it  is  a  little  less  and  souietimes  a  little  more,  but  on  the 
whole  it  conies  out  about  the  same  for  the  year.  I  don't  know 
any  reason  why  it  does,  only  the  value  is  about  right.  I  should 
think  that  would  follow  from  the  fact  that  Borden's  prices  have 
so  much  weight  with  the  general  market  that  the  Exchange  is 
practically  bound  to  follow  the  Borden's  very  nearly.  If  you 
don't  get  your  price  pretty  near  Burden's  why  the  next  contract 
day  the  farmers  nil  go  to  Bordens. 

MILK  STORK. 
TOXJ:   1 1 1: LI- AND: 

I  reside  tit  1-T52  Park  avenue.  Manhattan.  I  have  a  milk 
store.  I  bought  milk  from  Lie  bermann  first,  then  I  took  from 
Miller  "Brothers.  Now  I  take  from  Liebermann.  I  know  Blef- 
ord.  When  I  took  from  Lielx  rmann  I  paid  $2.20  a  can.  Then 
Miller  cniiK'  ai:d  I  gave  him  %'2  a  can,  and  after  that  came  Blef- 
ford.  I  buy  from  him  time  cans  for  $1.SO,  and  after  I  see  it  is- 
a  fake  business,  I  don't  buy  any  more.  I  buy  from  Miller. 
Blefford  said  when  be  off<  red  milk  to  me  that  it  was  a  n-rw  com- 
pany from  the  country.  The  reason  I  knew  Blefford  wa,s  a  fake 
business  was  because-  everybody  told  me  the  same.  Said  that 
Bkffonl  was  from  Liebermann.  from  the  old  company.  There 
wa,s  no  name  on  Blefford Js  wagon.  He  said  he  was  a  new  com- 
pany. Lielwmann  belongs  to  the  Wholesale  Milk  Dealers  Asso- 
ciation. He  wanted  me  to  go  out  to  a  lawyer  and  sign  a  contract, 
I  did  not  sign  the  contract.  I  don't  know  where  it  is.  I  did  not 
want  to  buy  from  Blefford  even  if  I  could  get  it  for  $1.80  a  can, 
because  I  don't  like  the  Liebermann  corporation.  Before  I  am 
buying  $2.12,  and  after  they  give  it  to  me  for  $1.80.  I  see  the 
fake  business. 


189 

JFiiED  H.  HKRKSTBOTEK  : 

I  reside  at  556  Madison  street,  Brooklyn.  I  was  in  the  milk 
business  about  two  and  one-balf  years  ago.  Previous  to  that  I 
liad  been  in  business  for  about  thirty  years  as  an  individual.  At 
the  last  place  of  business  I  was  in  the  High  Ground  Dairy  Com- 
pany. I  sold  out  my  part  of  it  to  Watson.  I  have  been  a  stock- 
holder in  the  Consolidated  Milk  Exchange  for  about  six  or  seven 
years.  I  bought  the  stock.  I  was  not  a  stockholder  in  the  old 
Milk  Exchange,  Limited.  I  have  never  been  a  director  or  officer 
of  the  Consolidated.  I  have  never  been  an  officer,  stock- 
holder or  director  of  the  'Sheffield  Farms,  Slawson-Decker  Com- 
pany, Borden's  Condensed1  Milk  Company  or  the  Mutual  Milk 
and  Cream  Company.  Of  course,  when  I  bought  the  stock  I  ex- 
pected to  always  know  the  price  of  milk  without  having  any  diffi- 
culty about  it.  If  it  wasn't  for  the  Exchange,  everybody  made 
his  own  price.  Sometimes  I  followed  the  Exchange  and  some- 
times I  didn't.  I  used  to  get  a  postal  card  from  the  u  Milk  Re- 
porter/' I  take  the  "  Milk  Reporter  "  too.  I  paid  $20  a  share  for 
my  stock.  Tbciro  might  be  a  feeling  of  loyalty  among  the  mem- 
bers of  the  Consolidated  Exchange  by  which  they  would  not  go 
into  each  other's  territory  and  compete  against  each  other.  There 
wasn't  this  feeling  of  loyalty  in  my  time.  I  think  the  Bordens 
and  Exchange  prices  average  pretty  near  the  same  year  in  and 
year  out.  I  was  never  a  member  of  the  Milk  Dealers  Protective 
Association.  I  dion't  know  anything  about  BlefFord.  I  have 
heard  about  the  d»ead  wagon.  I  hear  in  a  general  way  that  he 
tries  to  obtain  customers  by  meeting  the  other  man's1  price  or 
underselling  him.  Yes,  I  know  of  the  raise  in  price  from  eight 
cents  to  nine  cents,  but  I  don't  know  anything  about  any  agree- 
ment among  the  dealers  to  raise.  There  was  a  great  deal  of  talk 
about  it,  of  course.  There  was  some  talk  about  a  meeting  that 
Lote  Horton  and  Rogers  of  Borden's  and  Beakes  of  thei  Consoli- 
dated Milk  Exchange  had  over  in  Jersey  City.  I  heard  that  the 
gentleman  just  said  to  me  that  he  was  going  to  have  the  meeting 
and  the  price  of  milk  was  going  to  advance.  I  don't  know  the 
man  who  told  me.  I  heard  they  were  going  to  have  a  meeting 
three  weeks  before  they  had  it.  The  High  Ground  Dairy  Com- 
pany raised  the  price  to  nine  cents  on  Xovember  1st.  I  know 


190  [SENATE 

Mr.  Beakes  of  the  Consolidated  very  well.  I  also  know  Mr. 
Lnrmmle  and  Lote  Horton,  but  I  never  discussed  it  with  them. 
It  was  some  milk  man  that  told  me  about  this  meeting  but  I 
cannot  remember  his  name. 

DAVID  S.  HOKTON  : 

I  am  secretary  of  the  Sheffield  Farms,  Slawson-Decker 
Company,  and  have  been  such  since  the  spring  of  1905.  I  am 
not  a  director.  I  look  after  the  advertising  and  figure  up  the 
farmers'  accounts  each  month.  When  the  price  raised  from  eight 
cents  to  nine  cents,  I  was  the  one  that  ordered  the  cards.  My 
father  gave  me  directions  to  order  the  cards,  I  ordered  the  cards 
the  morning  that  Borden  put  the  notice  out.  I  think  that  was 
Saturday,  the  thirtieth  of  October.  They  were  distributed  Sun- 
day morning.  I  do  not  know  the  officers  of  Borden' s  or  the 
Mutual  Milk  and  Cream  Company,  except  that  I  used  to  know 
Mr.  Hannahs.  Early  in  the  spring  I  went  down  to  see  him 
about  poisoning  the  horses.  I  never  had  any  discussion  with 
him  in  reference  to  the  contemplated  advance  in  the  price  of  milk. 
I  know  most  of  the  members  of  the  Consolidated  Milk  Exchange. 

LOTON  HORTON: 

I  am  president  of  iho  Sheffield  .Farms,  Slawson-Decker 
Company,  and  have  been  such  since  its  organization  in  1902. 
We  have  one  company  here  and  we  have  another  one  in  2sTew  Jer- 
sey. The  New  York  company  owns  95  per  cent,  of  the  capital 
stock  of  the  !New  Jersey  company  and  the  funds  all  come  to  this 
company.  The  profits  that  are  made  we  put  in  the  treasury  of 
this  company.  We  own  the  real  estate  of  the  Jersey  company 
and  we  have  a  certain  number  of  wagons  that  we  keep  there  nearly 
all  the  year  round.  In  the  summer  time,  we  send  our  horses 
from  this  company  down  to  that  company  to  operate  our  business 
through  the  summer,  and  send  our  men;  for  instance,  when  our 
trade  drops  off  here  we  move  our  horses  to  the  seashore,  as  we 
call  it,  both  there  and  Long  Island.  The  business  is  principally 
at  the  resorts  along  tne  coast  in  the  summer  time.  Fixing  our 
price  depends  largely  upon  the  conditions  in  the  section  where 
we  are,  what  opposition  we  confront ;  for  instance,  we  have  oppo- 
sition on  the  Harlem  road  where  they  are  mostly  all  governed 


Ko.  45.]  191 

by  the  B.orden  prices;  in  Vermont,  we  are  in  opposition  to  Bos- 
ton ;  on  the  D.  <fe  H.  road,  we  are  in  opposition  to  Albany ;  in 
Delaware  county,  we  are  in  opposition  to  Philadelphia;  and  out 
toward  Blnghamton  we  have  quite  a  lively  opposition,  so  wher- 
ever we  confront  these  conditions,  we  have  to  meet  them.  For 
instance,  if  we  are  in  a  section  whore  Borden  is  buying,  we  pay 
the  producer  of  ordinary  milk  about  the  same  price  as  Borden 
does,  but  if  the  farmer  has  1  or  2  per  cent,  more  butter  fat  in  his 
milk,  we  pay  additional  for.  the  butter  fat  or  cream.  I  think 
we  have  thirty-three  creameries  in  all.  In  possibly  half,  we 
have  to  meet  Borden's  opposition.  We  do  not  have,  written  con- 
tracts with  the  fanners,  at  least  not  in  over  three  of  our 
creameries.  I  tell  them  that  our  prices  will  be  so  and  so  and  not 
less  than  that  much.  We  do  not  mention  Borden  prices,  but 
should  Borden  raise  we  have  a  form  which  we  fill  out  and  immeh 
diately  raise  our  prices  to  correspond.  We  have  one  creamery 
where  we  buy  on  the  Exchange  basis  in  our  business.  This  is 
owned  by  the  farmers  —  a  co-operative  creamery  which  we  lease- 
from  them ;  we  have  had  it  two  years  and  we  have  a  price  based 
on  the  Exchange  basis.  This  creamery  is  located,  I  think,  at 
Eaton.  It  is  the  fanners'  request  that  we  pay  Exchange  prices. 
A  postal  card  is  sent  every  time  the  prices  fluctuate,  from  the 
"  Milk  Reporter."  'Our  company  is  a  subscriber  to  the  "  Milk 
Reporter."  On  the  Ulster  &  Delaware  Railroad/,  we  get 
about  seven  carloads  a  day.  There  we  put  our  own  price  and 
our  own  standard.  On  the  D.  &  H.  we  have  four  or  five  cream- 
cries  and  we  fix  the  same  there.  They  have  a  higher  grade  of 
cows,  and  they  are  willing  to  come  in  and  they  make  a  richer 
cream  and  we  pay  for  it.  Up  in  Vermont  we  have  opened  up  — 
that  is  a  butter  section.  We  try  to  get  into  butter  sections  as 
much  as  we  can.  Where  you  find  the  butter  market,  you  find  a 
richer  cream.  They  keep  the  Holsteins  out.  We  offer  an  incen- 
tive1 to  the  farmer  for  his  butter  fat  that  will  pay  him  more  than 
the  value  of  the  butter,  and  we  buy  on  that  basis.  For  instance, 
this  month's  milk  might  be  4  2/10'  per  cent,  butter  fat, 
and  in  two  or  three  months  his  cows  slack  up  and  his  milk 
will  run  up  and  may  get  five  percent.  We  pay  3  cents  for  every 
1/10  per  cent,  butter  fat  on  every  100  pounds.  For  instance,  if 


192  [SEX ATE 

our  standard  price  to-day  would  be  $2  a  hundred  for  a  4  per  cent, 
milk,  on  a  5  per  cent,  milk  lie  would  get  30  cents  advance  per 
100  pounds  for  that  milk.  In  Delaware  county  they  produce 
vo;  Y  rich  milk,  and  they  have  been  very  successful.  They  have 
worked  on  that  butter  fat  syst<  in  •  < -ver  since  the -Sheffield  farms 
started.  The  founder  of  the  Sheffield  farms  started  out  on  a 
method  of  that  busmen  and  has  always  paid  for  that  butter  fat, 
and  1  bdicve  that  the  farmers  who  have  followed  out  these  ])lans 
have  Ix-cn  the  most,  successful  farmers  in  producing  milk  any- 
where, in  this  Stale  or  any  other  >tate  1  have  ever  visited.  In 
arming  at  our  own  standard  price,  we  submit  a  price  ourselves 
and  agnc  on  a  certain  price  six  months  ahead,  send  it  up  to  the 
fanner.-;  they  read  it,  and  if  they  are  satisfied  with  it  they  bring 
us  the  milk  and  if  they  arc  not  they  take  it  to  a  co-operative 
ereann-ry  of  their  own.  The  price  is  made  for  six  months.  We 
have  a  different  price  for  certain  months.  We  have  to  be  gov- 
erned a  gnat  deal  by  fighting  the  butter  market.  Philadelphia 
pays  more  for  butter  than  New  York  docs  and  the  big  operators 
go  in  there.  They  put  up  cnamcries  and  this  butter  is  put  up 
in  print-,  and  they  get  two  or  three  cents  a  pound  more,  and  we 
have  «MI:  to  compete  with  then  p<oplc  to  kei  p  the  farmers  under 
the  restrictions  that  we  have,  to  make  it  an  incentive  for  them 
to  bring  us  milk  instead  of  going  to  the  Philadelphia  market. 
That  is  one  of  the  hardest  competitors  that  we  have1.  The  price 
that  we  fix  is  talked  over  g<  ncrally  by  all  the  Board  of  Directors. 
and  particularly  with  those  having  th"  milk  department  in 
charge.  I!ord<ns  have  a  creamery  about  eight  miles  from  us  in 
a  place  called  Delhi,  and  their  standard  at  present  is  $,1.90  per 
hundred  for  4.1  per  cent,  butter  fat.  Our  price  is  $2.10  for 
4.5  per  cent,  butter  fat.  At  our  standard,  we  pay  $1.98  per  hun- 
dred for  -4.1  per  cent,  butter  fat.  We  charged  eight  cents  a  quart 
for  bottle-milk  until  October  1,  1907,  and  at  that  time  we  raised 
it  to  nine  edits  and  continued  until  the  1st  of  March.  Then  we 
reduced  it  to  eight  cents  and  continued  at  eight  cents  until  the 
1st  of  November,  190ft,  and  that  has  continued,  down  to  the 
present  time.  We  are  to  reduce  the  price  to  eight  cents  on  the 
1st  of  March.  We  raised  it  the  1st  of  November  to  put  it  on  a 
paying-  basis.  We  lost  money  in  October.  Our  fiscal  year  com- 


Xo.  45.]  193 

mences  the  first  day  of  March.  We  think  we  made  money  every 
month  in  the  year  1909,  starting  from  the  1st  of  March  up  to 
September  in  our  whole  business,  our  seashore  and  everything. 
In  2v"ew  York  city,  through  the  months  of  July  and  August,  on 
our  business  from  One  Hundred  and  Tenth  street,,  and  in  fact 
about  all  of  the  island,  we  will  say  from  Twenty-third  street  we 
are  divided  into  three  districts.  From  Twenty-third  to  Forty-sec- 
ond street,  the  lower  end  down  heTe;  from  there  to  One  Hundred 
and  Tenth  and  from  One  Hundred  and  Tenth  street  up.  On 
Manhattan  Island  above  Twenty-third  street  we  lost  money  in 
July  and  August  in  that  branch  of  the  business.  Xow,  in  this 
section,  we  made  money  through  the  summer;  we  have  a  great 
deal  of  office  trade,  and  we  sell  a  great  many  pints  at  five  cents, 
that  is  remunerative.  Xow,  in  the  Bronx,  I  think  we  made  money 
in  July,  as  I  remember  it.  In  August,  I  think  we  may  be  $500 
one  way  or  the  other,  something  like  that.  I  can't  remember. 
And  in  Brooklyn  in  August  we  lost  money.  But  our  seashore 
business,  we  sell  a  great  deal,  we  do  a  great  business  in  the  sea- 
shore, where  our  sales  are  possibly  from  thirty  to  forty  thousand 
quarts  a  day ;  possibly  a  couple  of  thousand  quarts  of  cream  •  we 
sell  that  milk  from  nine  to  ten  cents  a  quart,  except  special  milk, 
and  we  sell  that  from  fifteen  to  twenty  cents.  In  the  winter  time 
I  think  our  sales  are  about  75  per  cent,  household,  and  25  per 
cent,  that  we  charge  ten  cents  or  more.  In  the  summer  time  I 
think  50  per  cent,  of  our  milk  is  sold  for  nine  cents  or  more, 
that  is,  in  the  months  of  July  and  August.  That  is  because  the 
cost  of  delivery  is  more  at  the  seashore.  We  deliver  nothing  but 
Delaware  county  selected  milk  at  the  seashore.  That  is  ten  cents. 
That  is  the  same  milk  that  we  sell  here  the  year  round  at  ten 
cents  a  quart.  I  consult  with  my  two  sons,  D.  S.  Horton.  and 
C.  T.  Horton  before  putting  up  the  price.  On  October  30th, 
on  the  morning  when  he  came  back  from  loading  the  wagons  he 
came  in  and  told  me  that  the  Borden  people  had  advanced  their 
prices,  were  going  to  advance  thc-m  the  following  Monday;  he 
came  in  and  said,  "  Here  is  a  card,"  woke  me  up  about  6  o'clock 
when  he  got  back  from  loading  the  wagons ;  so  after  breakfast 
we  were  talking  about  it,  and  the  boy  said,  "  When  are  you  going 
to  put  up  ? "  I  said,  "  You  will  have  to  get  the  cards  out  as 
7 


194:  [SENATE 

soon  as  you  can,"  and  he  called  up  the  printer  and  said  he  could 
get  them  out  so  we  would  be  able  to  get  them  out  on  the  Monday 
following.  We  went  up  the  same  day  Bordeii  did.  I  had  talked 
this  over  with  members  of  the  company  previously  and  we  thought 
about  putting  up  the  price  the  1st  of  October,  but  we  didn't 
think  we  better  raise  it  the  1st  of  October.  I  am  a  member  of 
the  International  Milk  Dealers  Association  which  includes 
dealers  in  milk  in  practically  every  city  in  the  United  States, 
and  we  had  a  meeting  in  Milwaukee,  and  we  all  discussed  milk 
business,  and  then  I  went  pretty  thoroughly  over  the  milk  busi- 
ness all  through  the  west, —  different  dealers  to  get  idea  and  to 
see  if  I  could  find  anything  or  any  method  where  I  could  main- 
tain my  standard  and  do  business  with  les<  expense  than  what 
I  am  operating  to-day.  We  always  kept  an  eye  on  opposition. 
I  don't  know  the  officers  and  directors  of  Burden's  Condensed 
Milk  Company.  1  know  only  Mr.  Hannahs  of  the  Mutual  Com- 
pany. I  talked  with  Mr.  Kavanaugh  over  the  -phone  about  six 
weeks  ago,  but  I  have  never  met  him.  We  didn't  discuss  the 
price  of  milk.  I  know  most  of  the  members  of  the  Consolidated 
Exchange. 

(See  testimony,  page  3395.) 

I  never  had  any  conversation  with  Mr.  Beakes  previous  to 
November  1st  in  reference  to  raising  the  price  of  milk.  I  know 
Mr.  Cochran,  head  of  the  Rome  Department  for  Bordens.  Our 
company  has  never  been  represented  directly  or  indirectly  in  the 
Consolidated  Milk  Exchange.  Our  company  is  not  a  member  of 
the  Milk  Dealers  Protective  Association.  We  use  the  separator 
in  some  of  our  stations  to  make  cream,  either  to  ship  to  Xew 
York,  or  to  make  butter.  We  do  not  use  the  separator  to  stand- 
ardize milk,  that  is  make  it  3V>  per  cent,  butter  fat.  I  suppose 
that  we  are  the  originators  of  cleansing  milk  through  Sea  Island 
cotton  ;  we  use  cheese  cloth  and  Sea  Island  cotton  and  let  the  milk 
go  through  and  filter  it  that  way.  Of  course,  clarification  is  a  good 
thing  in  some  ways.  I  believe  in  'bottling  milk  as  near  to  the  con- 
sumer as  possible,  because,  by  having  good  help  and  scientific, 
practical  men,  I  discover  all  imperfections  before  it  gets  to  my 
consumer.  While  it  costs  more  money  to  build  these  plants  the 
way  we  build  them  it  is  an  advance  in  the  Twentieth  century,  the 


No.  45.]  195 

same  as  in  the  Nineteenth  century,  when  we  started  bottling  milk. 
Certified  milk  is  a  milk  where  you  have  to  have  a  building  that  is 
built  practically  on  the  style  of  a  conservatory,  the  cows  must  be 
tuberculin  tested ;  their  hair  must  be  clipped  around  their  udder, 
their  tail ;  these  cows,  must  be  washed  twice  a  day,  and  in  hot 
weather  and  when  it  is  dusty,  the  room  must  be  sprayed  before 
the  cow  comes  in.  The  farmer  must  have  a  building  built  where 
he  can  sterilize  the  clothes;  hot  and  cold  water  where  they  wash 
thtir  heads  and  pare  their  nails  and  use  vaseline  to  take  milk 
from  the  cow,  and  the  first  tablespoonful  must  be  milked  out  of 
each  teat ;  these  cows'  udders  should  be  cleaned  until  there  is  not 
a  stain  on  the  udder,  to  the  very  finest,  and  then  it  must  be  drawn 
from  the  cow  with  the  most  care  from  bacteria.  You  take  a  plate 
and  hold  it  up  here  in  the  room  and  you  would  find  thousands  of 
them  on  a  small  piece  of  plate;  and  that  has  got  to  be  put  into  a 
room  whore  the  room  is  closed  down  and  boiling  water,  and  the 
cans  must  be  sterilized  with  steam  250  degrees,  bottles  must  be 
sterilized,  milk  sealed,  must  have  a  hermetical  seal  on  it,  and 
goes  straight  from  the  man  that  produces  it  to  the  door;  and 
they  get  all  the  way  from  eight  cents  to  thirteen  cents  a  quart 
f.  o.  b.  shipping  station,  and  we  furnish  everything  but  the  cows 
and  the  milk.  We  charge  anywhere  from  fifteen  cents  to  twenty 
cents  for  that  milk.  Probably  95  per  cent,  of  the  milk  we  receive 
is  not  over  thirty-six  hours  old.  We  spent  $11,000  to  hermetically 
seal  milk  at  the  rate  of  two  bottles  a  second  because  we  give  a 
safe  milk  and  we  must  do  something  that  nobody  else  does.  I  do 
not  remember  about  any  one  coining  to  me  in  regard  to  a  cam- 
paign of  education  that  had  for  its  object  the  educating  of  the 
public  np  to  paying  a  higher  price  for  milk.  I  have  some  figures 
on  the  relative  value  of  skimmed  milk  and  unskimmed  milk  which 
I  obtained  from  Mr.  Olsen,  of  the  Polytechnic  Institute  of 
Brooklyn,  showing  you  why  I  object  to  bringing  skimmed  milk  in 
the  city  and  using  it  for  food.  Milk  can  be  obtained  in  the  stores 
at  6  cents  a  quart,  testing  from  three  and  four-tenths  to  three  and 
six-tenths.  Now  it  would  take  four  quarts  of  milk  to  sustain  a 
man  for  a  day.  T  lived  on  it  myself  for  foiir  weeks  and  did  as 
much  work  as  I  ever  did  in  my  life.  In  order  to  live  on  skimmed 
milk,  you  would  have  to  buy  nine  quarts  of  it  and1  it  costs  three 


196  [SENATE 

cents  a  quart  at  the  store,  making,  a  total  cost  per  day  of  twenty- 
seven  cents.  Therefore,  skimmed  milk  is  going  to  cost  you  three 
cents  more  than  pure  milk.  Xow,  why  would  you  bring  skimmed 
milk  in  the  market  ? 

(See  pages  3444,  3445,  and  '5446  fur  relative  food  values,  and 
cost  per  day;  see  also  pages  3441)  and  3450  of  testimony.) 

ADOLPH  HUTH: 

I  live  at  1501  Freeman  street.  I  am  manager  of  the  New  York 
Dairy  Produce  Company  of  155  Freeman  street.  I  am  an  officer 
and  director.  I  am  treasurer.  I  attended  a  meeting  in  Williams- 
burg.  I  think  it  was  the  1st  of  November,  at  Lorrimer  and  Ten 
Eyck  streets.  I  think  it  was  six  or  seven  days  after  the  1st  of 
November.  A  Mr.  Wierk,  president  of  the  company  I  work  for, 
asked  me  to  come.  He  said  they  won-  going  to  discuss  on  the 
price  of  milk  to  the  consumer.  Mr.  Oher  of  the  National  Dairy, 
Mr.  Ryder,  and  one  man  from  the  High  Ground  Dairy  Company 
were  there.  I  got  there  late  but  I  think  there  were  about  ten  or 
twelve  men  there.  Mr.  Lieberman  was  acting  as  chairman.  When 
I  got  there  I  did  not  hear  much  that  he  said  but  they  were  talking 
about  raising  milk  from  eight  to  nine  cents.  Lieberman  said  he 
thought  it  would  be  a  good  thing  if  they  had  a  uniform  price. 
Oher  said  he  would  raise  providing  everybody  else  would  raise. 
So  far  as  I  know  the  majority  came  to  an  agreement  to  raise  the 
price  to  nine  cents.  I  did  not  raise.  Wierck  said  lie  would  like 
to  raise  my  company  to  nine  cents.  I  told  him  I  could  not  raise 
it  to  nine  cents.  Ryder,  the  National  Dairy  Company  and  I.  were 
the  only  ones  that  did  not  raise  the  price.  We  are  in  a  poor 
neighborhood  of  factory  people.  The  first  week  in  November 
Chris  Oher,  Ryder  and  I  met  at  my  office  and  concluded  to  raise 
milk  to  nine  cents  on  the  15th  of  November.  James  C.  Ryder  was 
the  first  to  break  the  agreement.  He  told  me  the  Saturday  before 
that  he  would  not  raise  the  price.  I  have  been  selling  all  the 
time  at  eight  cents.  I  have  been  able  to  make  both  ends  meet 
by  taking  off  a  wagon  and  working  myself  in  between.  At  the 
meeting  I  spoke  of,  he  never  referred  to  it  in  my  presence.  Mr. 
Ryder  and  Mr.  Oher  and  I  agreed  to  raise  the  price  on  November 
15th.  Mr.  Wierck  was  also  present. 


Xo.  45.]  197 

MILK  DEALER. 
GEORGE  IHXKEX  : 

I  reside  at  194  19th  street,  Brooklyn,  and  have  been  in  the 
milk  business  since  1873  individually.  I  have  stations  in  the 
country  located  at  Sparta,  X.  J.,  Stockholm,  X.  J.,  Kellam,  Pa., 
and  Oquaga,  X.  Y.  All  of  my  business  is  done  in  Jersey  and 
Xew  York.  I  sell  in  Jersey  to  other  dealers.  I  don't  run  a 
retail  business.  I  am  a  stockholder  of  the  Consolidated  Milk 
Exchange  and  a  director.  Been  a  director  about  five  years.  I 
have  been  a  stockholder  in  the  consolidated  since  its  reorganiza- 
tion. So  far  as  I  know  the  Consolidated  Milk  Exchange  did  not 
deal  in  milk,  that  is,  buying  and  selling  milk.  At  the  meetings 
we  agreed  on  the  value  of  milk.  I  have  attended  special  meetings 
of  the  board  of  directors  to  consider  the  value  of  milk.  I  used 
to  get  a  postal  card  and  the  "  Milk  Reporter  "  by  which  I  found 
the  values  that  the  board  of  directors  had  arrived  at.  We  fixed 
our  prices  mostly  on  the  exchange  -valuations.  Pay  more  or 
less.  I  have  no  contract.  When  the  price  goes  up  or  down  I 
post  it  outside  of  my  dairy.  I  say  I  will  pay  the  same  as  Bor- 
dens  and  on  the  notice  I  state  we  will  pay  the  same  as  Bordens 
pay.  I  don't  know  as  the  figures  are  on.  There  is  nothing 
binding  about  my  agreement  with  my  customers.  It  costs  on  an 
average  to  handle  one  quart  of  milk  from  the  time  that  you  receive 
it  from  the  producer  until  the  time  that  you  deliver  it  to  the 
consumer  about  one-half  a  cent  for  bottling  and  a  little  over  a 
cent  for  freight  and  about  one-half  a  cent  to  bring  to  him.  I 
figure  that  the  milk  stands  me  six  and  one-half  cents  when  I 
get  it  home,  that  is,  at  the  present  time.  I  sell  for  eight  cents  so 
I  get  out  on  the  wrong  end  of  the  horn  when  the  month  is  up.  I 
have  one  wagon  that  can  put  out  400  quarts.  t  It  runs  from 
Thirty-ninth  to  Forty-third  streets,  four  blocks  one  way  and  three 
or  four  blocks  the  other  way.  One  man  will  leave  eight  or  ten 
quarts  in  a  house,  and  he  can  do  it  quicker  than  if  he  drives  a 
mile  to  leave  the  same  amount.  I  run  one  route  clean  down  to 
Fort  Hamilton.  If  I  have  a  great  many  quarts  to  deliver  in 
one  immediate  locality  I  can  deliver  it  cheaper.  I  should  think 
that  would  account  for  Bordens  being  able  to  make  deliveries 


[SENATE 

cheaper  than  I  can,  that  is,  they  deliver  to  a  large  number  of 
customers  in  an  immediate  vicinity.  I  don't  know  as  I  have  any- 
thing else  to  say  on  the  subject  than  if  the  thing  was  all  under 
the  one  head  and  you  could  district  your  routes,  you  could  sell 
milk  cheaper  than  you  do  now,  that  is,  make  certain  districts 
for  one  wagon.  Right  in  my  street  there  are  live  milk  wagons 
go  through,  ^ow,  one  wagon  could  serve  eight  or  ten  blocks 
around  and  all  of  that  expense  would  be  done  away  with.  A 
case  of  milk,  iced,  will  weigh  probably  from  eighty  to  eighty- 
five  pounds.  By  platform  prices,  the  supply  and  demand  would 
make  the  platform  price.  If  I  was  very  short  and  another 
dealer  had  a  few  cans  there  and  he  wanted  to  sell  it,  he  would 
put  a  premium  on  it  and  I  would  have  to  pay  it  if  I  wanted  it. 
I  take  the  "Milk  Reporter/-'  I  am  a  member  of  the  Mutual  Aid 
Society,  the  insurance  business,  that  is,  I  am  an  insurer.  I  have 
stock  in  the  Dairymen's  Manufacturing  Cmupany.  Thirty-three 
shares.  I  wish  to  state  that  I  have  never  heard  <rf  any  milk,  trust 
and  do  not  know  how  one  could  exist.  I  am  simply  selling  milk 
at  eight  cents.  I  am  losing  some  money  on  it  but  I  am, getting 
some  trade.  The  reason  why  I  follow  Bordens  is  because  I  am 
three  miles  from  one  of  their  large  Rations,  and  unless  I  pay 
the  same  as  they  do  I  probably  would  not  get  any  milk.  They 
is  competition  between  myself  and  Bordens.  Whenever  the  price 
is  dropped  to  us  by  farmers  we  drop  it  to  the  dealers. 

JOHN  JETTER: 

I  reside  at  439  Hudson  street,  and  have  been  in  the  milk  busi- 
ness for  twenty  years  individually.  I  receive  my  milk  on  the 
milk  platform,  Delaware,  Lackawanna  &  Western,  Hoboken.  I 
am  a  member  and  a  stockholder  of  the  Consolidated  Milk  Ex- 
change. I  own  five  shares.  I  was  a  stockholder  in  the  old  Milk 
Exchange  Limited.  I  was  never  an  officer  or  director.  I  have 
attended  meetings  of  the  stockholders  of  the  Consolidated!  Milk 
Exchange,  I  don't  think  I  attended  its  meetings  more  than  half 
a  dozen  times  since  its  existence.  I  guess  the  last  meeting  I  at- 
tended was  within  two  years.  The  last  meeting  that  I  attended 
was  at  Harrison  street,  I  believe.  That  was  a  stockholders'  meet- 
ing. Yes,  I  know  it  is  a  !N"ew  Jersey  corporation.  The  reason 


Xo.  45.]  199 

I  joined  it  is,  in  olden  times  we  used  to  have  a  great  time  about 
putting  a  value  on  milk,  and  oftentimes  this  one  wasn't  there 
and  that  one  wasn't  there,  and  I  thought  the  people  went  up  the 
country  and  knew  about  the  country,  and  how  such  things  are 
situated,  would  be  a  good  thing  to  have  such  men  there  and  find 
out  the  value  of  milk. 

Q.  Is  that  of  any  use  in  your  business  ? 

I  think  it  is  a  good  thing  to  have  a  standard  by  which  the 
price  of  milk  can  be  made  uniform.  It  wouldn't  do  in  business  if 
one  man  paid  a  great  deal  more  than  another  and  went  out  to  the 
country  to  buy  here  and  there,  and  in  one  place  he  pays  so  much 
more  than  in  another  place.  He  couldn't  very  well  keep  up  with 
those  people  wTho  bought  cheaper  through  the  coamtry  if  he  didn't 
know  the  prices,  about  the  valuation.  I  always  see  the  valuation 
in  most  any  newspaper,  in  the  "  Journal  "  or  "  World  "  OT  "  Milk 
Reporter."  I  would  also  get  postal  cards.  I  buy  my  milk  simply 
on  the  valuation  that  is  put  on  it  from  time  to  •time  by  the  ex- 
change. I  advanced  the  price  of  milk  on  November  1,  1909.  I 
sold  to  dealers,  that  is,  stores,  etc.  I  don't  sell  bottled  milk. 
Whatever  advance  I  made  about  Xovember  first  was  simply  the 
ordinary  advance  in  accordance  with  the  valuation  arrived  at  by 
the  exchange.  I  am  a  stockholder  in  the  Dairymen's  Manulac 
hiring  Company.  Own  fifteen  shares.  I  buy  my  milk  from 
creamery  men. 

CHARLES  E.  JOHXSOX: 

I  have  a  farm  which  I  work,  located  at  Goshen,  X.  Y.  I  have 
been  a  dealer  and  have  produced  milk  since  1872.  I  own  forty- 
eight  cows  and  produce  on  an  average  of  about  three  hundred  and 
twenty  quarts  per  day  during  the  present  season.  It  would 
hardly  average  that  the  year  round ;  I  produce  more  during  the 
months  of  May  and  June  than  during  the  other  months.  I  own 
five  shares  of  stock  in  the  Consolidated  Milk  Exchange.  My 
shares  of  stock  came  from  my  father.  I  derive  a  benefit  as  such 
stockholder  as  fellows:  If  they  vote  011  the  price  and  two  di- 
rectors of  the  exchange  are  farmers,  and  their  vote  raised  the 
price,  it  is  a  benefit  to  me  and  their  argument  ought  to  be  of 
benefit  to*  me  as  it  would  raise  the  price.  I  sell  my  milk  at  prices 


200  [SENATE 

that  are  fixed  by  the  board  of  directors  of  the  Consolidated  Milk 
Exchange.  I  have  sold  my  milk  in  this  manner  ever  since  the 
Consolidated  Milk  Exchange  was  organized.  This  price  is  pub- 
lished in  the  local  paper.  There  are  seventeen  directors,  two  of 
which  are  u  Simon-pure  "  farmers.  I*  never  attended  any  meetings 
of  the  board  of  directors  or  of  the  stockholders.  I  sell  my  milk 
to  the  Orange  County  Milk  Association.  I  make  agreements 
for  the  sale  of  milk  in  March  and  September,  said  agreement 
being  in  writing,  and  in  which  they  require  us  to  conform  to  the 
rules  of  the  board  of  health  and  then  agree  to  pay  us  the  exchange 
price.  I  suppose  every  man  in  my  locality  that  sells  milk  to  them 
has  a  similar  agreement.  The  cost  of  production  consists  of  re- 
pairs to  farm,  cows  to  keep  in  shape,  labor  of  producing  feed,  and 
fodder.  The  exchange  always  paid  the  exchange  price,  never  any 
more,  that  I  remember.  The  prices  fixed  by  the  Consolidated 
Milk  Exchange  for  the  year  1010  average  in  the  neighborhood  of 
three  and  one-half  cents  a  quart.  At  that  price,  I  did  not  make 
much  profit.  When  the  price  of  milk  was  raised  the  first  of 
November  by  the  dealers  of  New  York  city  (bottle  milk  from 
eight  cents  to  nine  cents)  I  did  not  get  a  proportionate  advance  in 
the  milk  that  I  sold  to  the  Orange  County  Milk  Association.  I 
got  a  raise  of  onerquarter  of  a  cent  on  the  23d  of  November.  It- 
costs  me,  at  the  present,  about  one  and  one-half  cents  to  produce 
a  quart  of  milk,  that  is,  only  for  the  feed  bill ;  that  does  not  in- 
clude help  or  any  recompense  for  my  service  or  the  value  of  the 
cow.  I  could  not  tell  just  what  it  would  cost  to  produce  milk  at 
a  fair  profit.  I  believe  there  is  more  money  in  selling  milk  at 
four  and  one-quarter  cents  a  quart  at  the  station  than  there  would 
be  in  manufacturing  it  into  butter. 

JOSEPH  V.  JORDAN  : 

I  reside  at  Newburg.  I  am  a  milk  producer  and  a  dealer  in 
milk,  cheese  and  dairy  products.  I  have  been  a  milk  dealer  for 
twenty-one  years  in  a  corporation  —  the  Hudson  Valley  Dairy 
Company.  I  am  its  president.  It  is  incorporated  under  the 
laws  of  the  State  of  New  York,  with  a  capital  stock  of  $60,000. 
I  own  the  majority  of  the  stock.  I  think  we  paid  10  per  cent, 
in  1907;  I  think  in  1908,  we  paid  10  per  cent;  I  think  we  paid 
more  in  1909  than  we  did  in  1908  —  about  12  per  cent.  I  own 


Xo.  45.]  201 

quite  a  number  of  creameries  in  the  country.  We  have  one  at 
East  Fishkill,  Dutchess  county,  Br inker hoff,  Dutchess  county, 
Walden  and  East  Walden,  Orange  county,  Plattskill,  Ulster 
county,  and  at  Xew  Kingston,  Delaware  county.  Those  are  the 
only  ones  in  operation.  \Ve  have  some  that  are  not  in  operation. 
I  was  not  a  member  of  the  old  Milk  Exchange,  Limited.  I  am  a 
member  of  the  consolidated.  I  bought  my  stock  about  ten  years 
ago.  I  don't  know  how  much  stock  I  have,  as  I  have  bought  some 
from  friends  since.  I  was  a  director  of  the  consolidated.  I  have 
not  been  to  a  meeting  in  the  last  year.  I  did  not  attend  the 
meetings.  I  do  not  see  what  use  the  exchange  is  any  way.  In 
my  judgment,  milk  would  not  vary  one-eighth  cent  a  quart 
whether  the  exchange  existed  or  not.  I  have  never  been  an  officer 
or  director  of  the  Bordens,  Sheffields,  or  the  Mutual  Company. 
Never  interested  in  any  way.  The  resolutions  adopted  were 
similar  to  the  one  on.  November  28,  1906,  which  was  read  from 
the  minute  book.  My  farm  is  one  of  the  largest  in  the  state  — 
3,000  acres.  I  think  the  exchange  valuation  at  present  is  four 
and  one-quarter  cents.  That  is  what  is  published.  We  are  pay- 
ing that  price  at  one  of  our  creameries.  At  another,  we  are  pay- 
ing four  and  one-eighth  cents ;  at  another,  four  cents  and  in  some 
places  we  are  paying  five  cents.  I  am  a  stockholder  in  the  con- 
solidated. I  saw  the  exchange  prices  in  various  newspapers.  I 
used  to  take  the  "  Milk  Reporter  "  but  do  not  now.  Most  of  my 
milk  is  sold  in  Newburg  and  the  immediate  vicinity.  I  think 
Mr.  Laemmle  is  secretary  of  the  consolidated  at  the  present  time. 
I  do  not  sell  any  bottle  milk  at  wholesale  unless  it  is  a  case  or  two 
occasionally.  We  use  the  separator  in  one  place  in  Delaware 
county.  We  make  cheese  of  the  skim  milk  and  the  cream  is  sold. 
I  never  used  a  separator  for  purifying  the  milk.  I  think  I  re- 
ceived a  dividend  at  one  time  on  my  stock  in  the  consolidated 
three  or  four  years  ago.  Probably  6  per  cent.  —  I  do  not  remem- 
ber. The  consolidated  held  some  real  estate.  It  derives  its  in- 
come from  the  rentals  of  the  real  estate,  and  dues.  I  do  not 
know  what  my  object  was  in  becoming  a  stockholder  and  member 
of  the  Consolidated  Milk  Exchange. 

(Witness  is  shown  the  minute  book  of  the  special  meeting  of 
the  directors   held  November   19,   1908,  which  reads,   "  Special 


202  [SENATE 

meeting  was  called  at  the  request  of  Messrs.  Howell,  Hunteman 
and  J.  V.  Jordan,"  and  witness  says:) 

"  I  don't  believe  that  the  minutes  are  correct,  because  I  don't 
believe  that  I  was  a  party  to  any  call,  because  I  had  taken  so 
little  interest  in  late  years."  If  cream  is  iced,  it  should  be 
fresh  three  or  four  days  or  a  week.  We  sell  some  cream.  It  is 
shipped  by  rail  and  boat.  I  think  the  freight  rate  by  boat  is 
thirty-two  cents  —  twenty-six  cents  by  rail.  I  think  we  shipped 
about  10  per  cent,  or  15  per  cent,  of  our  milk  by  boat  this  sum- 
mer. The  freight  on  the  boat  is  paid  by  the  consignee.  Our 
price  is  f.  o.  b.  shipping  station  by  rail.  I  do  not  control  the 
making  of  the  contract  for  freight.  My  milk  comes  down  by  the 
Central  Hudson  Steamboat  company.  It  stops  at  Cornwall,  West 
Point  and  Highland  Falls.  There  is  a  flush  of  milk  in  my  local- 
ity at  the  present  time.  I  have  119  cows.  We  have  a  surplus  at 
the  farm  and  also  where  \ve  buy  in  the  different  places.  It  costs 
me  more  to  produce  milk  than  most  anybody  else  because  it  goes 
to  the  United  States  Government  from  my  farm.  We  are  under 
contract  to  produce  it  in  a  very  cleanly  manner  and  use  extra  pre- 
cautions ;  for  instance :  I  have  two  men  every  day  in  the  stable 
cleaning  the  cows,  grooming  the  cows,  and  all  those  expenses  run 
up  into  money  when  you  produce  milk.  Everything  is  madte  very 
cleanly  for  the  Military  Academy.  I  have  no  idea  what  it  would 
cost  the  ordinary  farmer  to  produce  a  quart  of  milk.  My  judg- 
ment is  that  the  proper  and  fair  way  to  buy  milk  is  on  the  butter 
and  cheese  test. 

JAMES  J.  KAVAXAUGII: 

I  am  president  of  the  Mutual  Milk  &  Cream  Company.  I 
have  been  such  since  this  last  April.  I  have  been  a  director  about 
three  years.  I  was  a  driver  for  the  company  once.  I  was  fore- 
man of  one .  of  their  departments  for  a  while.  We  have  three 
different  prices  which  we  pay  the  producer.  Some  we  pay  Bor- 
dens  price,  some  we  pay  exchange  and  in  some  places  we  pay 
independent  prices  of  our  own  based  upon  what  we  think  milk 
is  worth.  I  think  wye  have  thirty-five  creameries,  the  greater  part 
of  them  are  located  in  New  York  State.  I  think  Bordens  price 
rules  in  half  of  the  creameries,  exchange  price  in  about  a  half 
dozen,  and  the  balance  our  o\vn  price.  We  base  our  prices  on  the 


No.  45.]  203 

butter  and  cheese  market.  That  particular  part  of  the  country 
is  a  butter  and  cheese  country,  on  the  Rutland  railroad  and  on  the 
Rome  &  Watertown,  and  I  think  we  have  paid  higher  prices  than 
exchange  and  Bordens.  I  do  not  believe  there  has  been  much 
(liiference  in  the  exchange  and  Borden's  prices  in  the  last  two  or 
three  years.  I  find  the  exchange  price  from  the  kk  Milk  Reporter. " 
They  generally  send  a  postal  card  around.  I  subscribe  for  the 
lt  Milk  Reporter"  and  pay  twenty-live  cents  extra,  for  the  postal 
card.  When  we  receive  the  postal  card  we  send  a  notice  to  the 
creameries  that  the  price  is  that  much  higher  or  lower  until  fur- 
ther notice.  We  have  no  representative  on  the  exchange.  I  don't 
remember  but  I  believe  sonic  y<-ars  ago  some  member  of  our  com- 
pany was  connected  with  the  exchange.  I  think  the  company  was 
formed  in  1898.  When  I  was  in  the  milk  business  alone  I  was 
supplied  by  the  Rockdale  Company.  They  based  their  charge 
around  the  exchange  prices.  Our  company  raised  the  price  on 
the  first  of  Xovember  from  eight,  to  nine  cents  a  quart  for  bottled 
milk.  We  sold  together  between  150,000  to  60,000  quarts  of 
milk  a  day.  The  retail  percentage  is  small.  We  are  in  the  retail 
business  about  three  years.  Most  of  it  is  wholesale.  When  I 
first  came  in  the  company  there  was  no  retail  business.  When 
sold  wholesale,  we  did  what  the  customer  wanted.  We  buy  at  a 
stated  price  in  the  country  but  the  average  store  will  not  buy 
except  on  exchange  price.  The  Milk  Dealers  Protective  Asso- 
ciation sell  so  much  above  the  exchange  price.  Some  places  when 
I  was  in  business  I  got  more  than  thirty-eight  above  exchange. 
In  majority  of  cases  they  buy  twenty-eight  and  thirty-eight  above 
exchange  price.  During  the  month  of  October  we  discussed  the 
contemplated  raise  of  the  price  of  bottled  milk  repeatedly  among 
ourselves.  That  is  the  executive  committee.  This  is>  some  time 
after  we  put  out  our  winter  price.  Some  contracts  for  the  winter 
were  for  six  months  and  some  based  on  a  monthly  price.  At  the 
discussion  we  realized  the  fact  that  if  we  continue  to  sell  milk 
during  the  winter  months  at  eight  cents  we  would  face  quite  a 
loss,  and  we  also  said  it  was  suicide  to  raise  it  unless  Bordens 
did.  They  did  not,  and  they  went  along  all  October  and  sold  it 
for  eight  cents.  We  could  not  raise  our  price  unless  Bordens 
did  without  losing  our  trade.  I  think  that  Bordens  controls  50 


204  [SENATE 

per  cent,  of  the  retail  business.  I  found  out  on  Saturday  that 
Borden  had  raised  the  price.  There  was  a  notice  on  my  desk.  I 
had  a  discussion  with  some  of  the  executive  committee  and  we  got 
our  notices  the  same  day  and  sent-  them  out  on  Sunday  morning. 
I  told  our  people  that  now  Bordens  have  raised  their  price  and 
there  was  only  one  thing  for  us  to  do  i-  to  follow  suit.  I  did 
not  know  at  that  time  that  Sheffield  had  raised  the  price,  but 
I  think  later  in  the  day  someone  called  me  up  and  asked  me  what 
we  had  done,  and  I  told  him  we  had  raised  it  to  nine  cents.  I 
do  not  know  any  of  the  officers  or  directors  of  Bordens.  Mi-. 
Beakes  once  called  me  up  on  the  telephone.  I  think  it  was  in 
October  and  I  said  to  him  it  looks  as  though  we  are  going  to  lose 
a  barrel  of  money  this  winter  if  Borden  don't  put  their  price 
up,  and  I  asked  him  whether  he  knew  if  they  were  going  to  or 
not,  and  he  said  he  didn't  know.  I  told  him  we  would  go  up 
if  Bordens  went  up.  I  would  not  swear  the  Mr.  Beakes  did  not 
say  to  me  that  he  was  going  to  see  the  representative  of  Borden- 
in  order  to  advance  the  price  of  milk.  lie  may  have  said  it;  I 
do  not  remember.  He  did  not  say  anything  about  Sheffield  at  that 
time.  I  think  the  most  of  the  conversation  wa-  in  regard  to  cans, 
buying  cans.  About  the  first  of  October  "Mr.  Van  Bumcl  and 
Mr.  Tuthill  of  the  Sheffield  farms  came  to  get  some  information 
in  regard  to  some  horses  that  were  poisoned  on  them,  and  I  said 
to  them  at  that  time  that  I  expected  the  price  of  milk  would  go 
up  to  nine  cents  the  first  of  October.  Unfortunately  it  did  not. 
Bordens  did  not  put  it  up.  I  said  if  they  didn't  go  to  nine  cents 
you  would  lose  a  lot  of  money.  They  are  the  only  gentlemen 
I  know  of  the  Sheffield  Company.  Witness  showing  list  of  mem- 
bers of  the  Consolidated  Milk  Exchange  say-  lie  knows  C.  H.  C. 
Beakes,  John  P.  Wierck,  Thomas  O.  Smith,  W.  B.  Oonklin, 
Webb  Harrison,  Chris  Vagts,  Slaughter  and  M.  L.  Sanford.  We 
have  no  representative  on  the  Consolidated  Exchange,  but  when 
we  did  have  one  it  was  John  Kroos.  We  bought  the  Sanford 
business  and  I  believe  we  requested  them  both  to  resign  shortly 
after  we  bought  the  business.  That  was  about  three  years  ago.  I 
think  Mr.  Kroos  was  president  or  vice-president  and  he  was  also 
a  member  of  the  exchange.  He  is  still  connected  with  our  com- 
pany. He  manages  one  of  our  branches.  He  is  no  longer  a 


No.  45.]  205 

member  of  the  Consolidated  Milk  Exchange  as  I  know  of.  My 
company  belongs  to  some  insurance  society  but  I  do  not  know  the 
name  of  it.  We  bought  Mr.  Sanford's  business  and  we  had1  no 
further  use  for  him,  and  I  believe  the  board  of  directors  decided 
to  let  him  go,  and  in  the  event  that  they  wanted  hisi  services, 
at  any  time,  paying  him  at  the  rate  of  five  dollars  a  day.  If  we 
had  a  customer  that  we  bought  out  from  him  who  was  dissatisfied, 
and  we  had  some  trouble  and  were  going  to  lose  them,  we  would 
send  for  Sanford  and  he  would  straighten  it  out,  and  he  is  living 
in  a  central  location,  around  Warwick,  and  whenever  we  want 
anything  done  in  those  places  it  is  cheaper  to  have  Sanford  do  it 
than  to  send  a  man  from  New  York.  I  was  not  aware  that  San- 
ford was  a  member  of  the  consolidated  until  I  saw  his  name.  We 
did  not  authorize  to  go  around  and  see  milk  dealers  in  reference 
to  any  agreement  to  put  up  the  price  of  milk,  and  he  never  did 
so  to  my  knowledge.  My  company  is  not  a  member  of  the  Milk 
Dealers  Protective  Association.  No  officer  of  our  company  be- 
longs to  it.  About  last  April  or  May, 'shortly  after  I  came  into 
office  as  president,  the  Milk  Dealers  Protective  Association  sent 
word  to  me  through  Mr.  Arnstein  that  they  would  like  us  to 
join  their  association,  which  they  informed  us  was  a  can  bureau 
and  social  organization  of  the  milk  dealers,  and  they  said  a  great 
many  of  the  dealers  in  New  York  and  Brooklyn  belonged  to  it. 
I  refused,  and  so  Mr.  Arnstein  s-aid  afterward  we  ought  to  be- 
long. It  wouldn't  hurt  anything.  I  said  "All  right,  Arnstein, 
you  can  join  this  association,  but  we  won't  join  it  as  a  company, 
and  we  will  pay  your  dues  whatever  they  amount  to,"  and  he 
did,  and  he  belonged  to  it  until  along  about  the  1st  of  November. 
I  remember  in  October  I  told  him  to  resign  —  that  he  was  losing 
too  much  time  attending  the  meetings,  and  I  told  him  to  resign 
and  I  think  he  put  it  off  until  probably,  the  fifth,  sixth  or  sev- 
enth of  November,  and  then  he  wrote  them  a  letter  and  I  told 
him  he  better  register  it  and  get  a  receipt  for  it,  and  he  has  done 
that.  Mr.  Arnstein  told  me  they  were  more  of  a  social  organiza- 
tion than  anything  else.  They  wanted  to  get  up  some  system  of 
collecting  our  can?.  They  also  wanted  to  make  some  kind  of  a 
protest  against  the  law  in  Albany  whereby  we  were  fined  for 
milk  containing  less  than  12  per  cent,  of  solids,  where  the  cows 


206  [SENATE 

gave  it,  which  of  course,  we  were.  We  established  a  price  of 
thirty-eight  cents  a  can  above  the  Exchange  price.  I  never  heard 
that  the  protective  association  established  that,  I  may  have  dis- 
cussed with  Arnstein  the  advisability  or  necessity  of  raising  the 
price  of  milk.  We  have  often  discussed  it  among  ourselves  during 
the  month  of  October.  I  never  heard  of  Mr.  Bleffort.  I  do  not 
know  of  the  general  system  among  the  milk  dealers  of  the  pro- 
tective association  to  prevent  the  selling  of  milk  at  a  less  price 
than  they  established  it.  We  use  separators  in  several  of  our 
creameries  for  making  cream.  We  make  caseine  and  pot  cheese 
of  skim  milk  —  we  have  a  contract  with  the  Caseine  Company 
of  America,  or  one  of  its  subsidiaries.  Caseine  is  used  to  make 
buttons  and  billiard  balls.  It  is  a  solid  of  the  skim  milk  sepa- 
rated from  the  whey,  separated  from  the  fresh  skim  milk  by 
sulphuric  acid.  I  believe  skim  milk  is  a  healthful  food,  bur  t«> 
bring  it  into  Xe\v  York  I  do  not  approve.  I  am  afraid  the  repu- 
table dealer  would  be  at  a  disadvantage  by  handling  it,  but  that 
is  the  only  objection.  I  believe  it  is  a  good  healthy  food.  \\V 
never  use  a  separator  for  standardizing  milk.  I  do  not  believe 
that  milk  containing  1}  per  cent,  butter  fat  would  comply  with 
the  law,  that  is,  I  believe,  3  per  cent,  fat  and  12  per  cent,  solids. 
I  would  say  that  all  of  our  milk  is  less  than  forty-eight  hours 
old  when  it  is  delivered.  There  might  be  in  the  winter  time, 
where  it  was  affected  by  snow  storms,  there  might  be  some  hard- 
ship. The  most  of  our  cream  comes  from  the  thirty-t\v«;-cent 
zone.  We  have  kept  cream  where  we  would  have  to  have  a  large 
supply,  like  in  anticipation  for  the  Fourth  of  July  for  several 
days  ahead,  but  not  generally.  Condensed  milk,  if  it  is  properly 
cured,  improves  in  flavor  by  being  a  few  days  old.  We  manu- 
facture condensed  milk  in  an  unsweetened  form  only.  We  buy 
some  milk  from  Canada  on  the  Rutland  road.  We  have  to  pay 
a  duty  of  twenty-five  cent?  on  every  eighty  pounds.  Then  there 
is  $3  entry  fee  and  there  is  a  fifty-cent  fee  we  pay  for 
drawing  up  papers.  We  pay  this  same  price  for  the  milk  from 
Canada  as  for  milk  from  here;  if  they  bring  it  across  they  have 
to  pay  a  duty.  If  you  were  approached  by  some  one  in  regard 
to  the  campaign  on  education,  I  claim  that  the  milk  dealers  were 
abused  and  pounded  by  the  public  in  general,,  and  he  said  that 


Xo.  45.]  207 

they  were  getting  up  a  series  of  educational  articles  to  let  the 
public  know  how  the  milk  was  produced  and  taken  care  of  and 
the  cost  of  delivering  it  in  a  sanitary  condition  in  Xew  York,  and 
he  asked  for  some  subscriptions  toward  the  matter  which  I  re- 
fused. I  think  he  said  the  Beakes  Dairy  Company,  and  I  am 
not  sure  whether  he  mentioned  the  Sheffield  Farms.  We  have 
some  contract  for  selling  milk  wholesale  for  four  and  three- 
quarters  cents  a  quart.  We  lose  money  on  these  contracts  at  the 
present  time.  We  would  not  lose  money  in  the  summer.  All 
those  contracts  cover  a  year.  We  might  make  a  little  profit  dur- 
ing the  whole  year.  We  pasteurize  all  of  our  bottle  milk  and 
heat  it  to  150  and  bottle  it  and  ice  it  and  then  deliver  it  to  our 
other  distributing  plants  and  deliver  it  to  the  customer.  Our 
retail  wagons  only  serve  1 5*0  to  175  bottles  of  milk,  whetreas  a 
wholesale  wagon  can  sell  about  sixty  cans  of  forty  quarts  each, 
and  wye  average  about  twelve  trips.  I  know  in  our  business  we 
put  in  about  two  carloads  of  bottles  a  month.  We  figure 
it  costs  us  about  one-quarter  cent  per  quart  to  pasteurize 
and  one-third  cent  to  bottle,  and  all  additional  cost  per 
bottle  is  for  delivery.  We  deliver  about  2,40'0  quarts'  of 
milk  with  a  man  and  two  horses  in  less  time  than  it 
takes  to  deliver  160  quarts  with  one  man  and  one  horse.  I  am  a 
stockholder  but  I  do  not  remember  of  any  rule  whereby  stock- 
holders get  the  milk  at  five  cents  a  quart.  They  used  to  sell  it 
at  seven  cents  when  it  was  eight  and  eight  when  it  was  nine  cents 
to  stockholders.  I  have  one  condensery  located  in  Pulaski,  Xew 
York.  Our  milk  is  pasteurized  in  the  city.  I  think  that  the 
public  would  benefit  if  all  milk  had  to  be  pasteurized  but  it  would 
be  a  hardship  to  the  small  dealer.  We  were  experimenting  last 
Saturday  and  we  had  our  milk  tested  for  bacteria  before  it  was 
pasteurized,  and  I  think  it  tested  something  like  2i5O,000  per 
cubic  centimeter,  and  pasteurized  it  and  rendered  it  sterile.  I 
think  it  is  little  cheaper  to  bottle  milk  in  the  country  than  to 
bottle  it  in  the  city.  I  am  a  believer  in  pasteurization.  It  may  be 
that  many  of  the  bacteria  that  are  killed  by  this  sterilization  are 
bacteria  that  are  harmless  and  are  bacteria  that  kill  the  offensive 
bacteria  and  are  thus  harmless.  I  think  some  time  la>st  winter 
we  paid  an  assessment  of  $500  to  the  Milk  Dealers'  Protective 


208  [SEX ATE 

Association.  They  wanted  some  kind  of  a  fund  in  their  treasury. 
I  believe  they  wanted  to  fight  this  law,  this  12  per  cent,  solid 
law,  where  the  cows  did  not  give  it.  Mr.  Arnstein  explained 
that  to  me.  I  think  Mr.  Arnstein  collected  fifty  cents  every  once 
and  a  while  for  dues  from  the  Holland  branch,  the  West  Side 
branch  and  the  East  Side  branch.  I  have  no  idea  of  the  total 
amount  that  was  collected  by  the  Milk  Dealers'  Protective 
Association. 

JOHN  H.  KEHEER: 

I  am  secretary  and  treasurer  of  the  Mutual  Cream  and  Milk 
Company.  I  have  been  such  for  three  years,  in  March.  I  have 
been  a  director  for  the  same  period  of  time.  I  was  clerk,  collector 
and  superintendent.  Prior  to  that  time  I  have  been  in  its 
employ  since  its  organization.  I  look  after  the  collection,  a  part 
of  the  correspondence,  and  I  am  also  purchasing  agent.  As  a 
member  of  the  executive  board  I  have  si.metliing  to  do  with  fix- 
ing the  price  my  company  pays  the  producer  for  milk.  As  soon 
as  we  saw  what  BonlenV  pri<-c<  w<re,  when  ihty  came  out  the 
middle  of  the  month,  we  knew  that  we  had  to  raise  our  price. 
The  cost  of  bottled  milk  would  be  more  than  eight  cents,  it  was 
discussed  from  time  to  time  in  meetings  of  the  board  about  Mr. 
Kavanaugh  calling  up  our  company  to  find  out  what  we  are  going 
to  clc.  I  never  consulted  with  any  one  <mtsi<le  of  our  company 
about  the  necessity  of  raising  the  price  of  milk.  I  know  none 
of  the  officers  or  directors  of  the  Bordeii's  Condensed  Milk  Com- 
pany. I  know  Mr.  Von  Bomel  of  the  -Sheffield  Farms-Slosson- 
Deeker  Company.  I  think  I  saw  Mr.  Von  Bomel  about  a  year 
ago.  I  never  talked  to  him  in  regard  to  raising  the  price  of  milk. 
I  know  Mr.  Beiakes  of  the  Consolidated  Milk  Exchange,  and  Mr. 
Smith ;  I  have  met  Joseph  Laemmle.  I  know  Mr.  Ferist.  He  is 
a  stockholder  in  our  company.  I  have  met  Mr.  Chardavoyne, 
Mr.  Webb  Harrison,  George  Slander  and  Chris  Vaghts.  I  think 
I  have  met  E.  B.  Sanford.  I  know  Mr.  Conover  and  M.  L.  S'an- 
ford  and  George  E.  Beakes.  I  think  that  is  all  I  know.  Mr. 
M.  L.  Sanford  is  the  only  one  that  I  remember  seeing.  I  did  not 
talk  to  him  about  raising  the  price  of  milk.  I  think  Mr.  San- 
ford looked  after  five  or  six  of  our  creameries.  We  employed 
him  to  do  that  because  he  w<as  located  half  way  between  those 


Xo.  45.]  209 

stations  and  it  was  cheaper  to  send  him  up  there.  It  saved  car 
fare.  In  the  Milk  Dealers'  Protective  Association  we  are  repre- 
sented by  one  member  of  our  company,  Mr.  Onstein.  Mr. 
Tietjen  is  an  employee  of  ours  but  he  does  not  represent  us.  I 
never  attended  the  meetings  of  the  Milk  Dealers'  Association. 
Our  people  would  not  belong  to  it  as  a  company  and  Mr.  On  stein 
wanted  to  join  and  they  had  no  objection  and  I  believe  wre  were 
to  pay  the  dues.  We  did  not  want  to  tie  up  with  any  protective 
association.  Mr.  Onstein  is  a  stockholder  in  o<ur  company.  The 
amount  we  paid  for  him  was  $500.  Mr.  Van  Hof  had  been  in 
charge  of  the  retail  department  but  a  short  time,  and  I  believe 
that  he  wanted  to  see  the  price  stay  at  eight  cents  so  that  he 
would  get  a  lot  of  business.  Mr.  Kavianaugh  ordered  Mr.  Onstein 
to  resign  from  the  protective  association.  He  told  me  he  was 
losing  too  much  time  at  the  meetings.  I  should  say  off-hand,  we 
sell  about  twelve  to  fifteen  thousand  quarts  of  milk  per  day  in 
bottles,  and  about  140,000  quarts  in  cans.  There  is  one 
thing  I  would  like  to  add.  The  other  day  you  asked  me 
to  look  up  whether  we  sold  milk  to  stockholders  for  four  or 
five  cents  per  quart,  and  I  found  out  we  did.  That  was  in  1907. 
The  question  you  asked  was  did  we  sell  milk  so  that  we  can 
resell  it.  We  did  sell  it  to  them  at  four  and  five  cents,  loose 
milk  for  their  own  personal  use,  and  we  did  sell  them  bottled 
milk  at  six  cents  when  we  first  went  into  the  retail  business. 
When  our  company  was  organized  it  was  composed  mainly  of 
small  dealers  that  went  into  the  Mutual  and  made  this  large 
corporation.  There  was  an  agreement  made  iat  that  time  that  all 
the  dealers  that  went  into  the  Mutual  should  not  go  into  the 
milk  business  in  their  own  name  for  twenty  years  after  they 
sold  to  the  Mutual.  Some  of  them  do  business  now  but  I  think 
we  gave  them  permission  to  do  that.  They  have  never  been 
molested  by  us. 

MILK,  BUTTER  A3TD  EGG  STORE. 

JOHN  KEOGH: 

I  reside  at  230  East  Forty-eighth  street.  I  am  in  the  real 
estate  business  and  have  got  a  milk,  butter  and  egg  store.  I 
was  in  the  milk  business  twenty-five  years  but  I  sold  out  five 


210  [S'EXATK 

years  'ago.  I  had  the  store  'all  the  time.  My  place  of  business 
was  at  37  Catharine  street.  My  store  at  present  is  at  37  Cath- 
arine street.  I  haven't  any  dairies.  I  own  a  farm  and  the  stock, 
a  number  of  cows,  but  I  don't  run  it  myself.  My  brother  runs 
it.  I  hold  a  half  share  in  the  Consolidated  Milk  Exchange. 
I  think  I  'attended  the  first  and  second  meetings  of  the  Consoli- 
dated Milk  Exchange.  I  think  in  1899.  I  was  never  <a  director 
or  officer.  I  am  not  connected  with  Bordens  or  Sheffield's  or  the 
Mutual  Milk  and  Cream  Company.  As  to  why  I  bought  the 
stock  in  the  Consolidated  Milk  Exchange  I  would  say,  before 
the  Milk  Exchange  there  was  a  great  deal  of  trouble  in  the 
making  of  prices;  everybody  was  shouting  for  their  own  price 
and  I  had  more  or  less  trouble  with  the  farmers;  but  after  T 
joined  the  Milk  E'xehange  and  I  told  them  I  was  buying  milk 
on  the  Milk  Exchange  price,  I  had  no  trouble  since.  I  subscribe 
for  the  "  Milk  Reporter."  If  the  price  changes,  they  send  me  a 
postal  card.  I  never  had  a  written  contract  with  a  farmer  in 
my  life.  The  nuajority  of  my  contracts  with  the  farmers,  that  is, 
agreements  to  sell  to  them,  were  at  the  Exchange  prices.  If  they 
raised  the  price,  I  would  have  to  pay  whatever  they  made  the 
price.  Yes,  I  heard  about  the  raising  of  the  price  of  milk  on 
November  1st  from  eight  ceiits  to  nine  cents.  In  fact,  I  pay  it 
myself,  when  I  don't  bring  the  milk  uptown,  I  pay  nine  cents. 
I  did  not  raise  the  price  of  milk  that  I  sold  in  my  store.  I  sell 
about  seven  cases  of  bottled  milk  a  day.  I  charge  eight  conts 
for  bottled  milk.  I  sell  dipped  milk.  I  charge  eight  cents  for 
that,  but  we  give  a  little  over  measure.  In  the  dipped  milk  we 
realize  about  six  and  one-half  cents,  but  six  cents  in  the  summer. 
My  prices  have  been  the  same  for  thirty  years.  My  bottled  milk 
is  sold  over  the  counter.  I  don't  deliver  any  of  it.  I  would 
like  to  say  that  I  don't  believe  that  milk  can  be  sold  for  any  less 
than  nine  cents  a  bottle  by  the  small  dealer,  and  thait  I  would 
not  sell  it,  only  my  driver  suggested  to  me  that  he  would  have  to 
sell  it  for  eight  cents  because  there  are  a  good  many  poor  people 
in  his  neighborhood  on  his  route  and  that  is  the  only  reason. 
I  am  not  looking  for  bouquets  because  1  sold  it  for  ten  cents 
twenty-eight  years  ago  and  sold  all  the  milk  I  had. 


No.  45.]  211 

JOSEPH  LAEMMLE: 

I  reside  in  the  city  of  New  York  and  have  been  in  the  milk 
business  since  1872,  and  at  present  am  president  of  the  Laemmle 
Dairy  Company,  a  New  York  corporation,  with  a  capital  stock  of 
$20,000,  of  which  I  own  about  50  per  cent.,  which  was  organized 
in  1906.  My  son  and  Jacob  C.  Wund  are  secretary  and  treasurer 
and  vice-president,  respectively.  We  have  no  branch  offices  in 
New  York.  We  have  stations  in  Onondaga,  Otsego,  Rensselaer 
and  Tioga  counties.  The  stock  in  my  company  was  issued  for 
creameries,  machinery,  etc.,  used  in  the  business,  none  for  good 
will.  I  am  not  connected  with  any  other  milk  corporation.  I  am 
a  stockholder,  director  and  officer  of  the  Consolidated  Milk  Ex- 
change, and  have  been  since  its  incorporation,  and  I  was  a  member 
of  the  Milk  Exchange,  Limited.  I  do  not  think  I  was  an  incorpo- 
rator  of  the  latter  and  was  only  a  director  thereof  for  some  years. 
The  Milk  Exchange,  Limited,  was  organized  about  1882  and  con- 
tinued to  do  business  up  to  1895,  and  our  last  office  was  at  (> 
Harrison  street,  New  York,  formerly  at  20  Northmore  street,  New 
York  city.  I  don't  know  how  long  we  were  there.  We  were  at 
6  Harrison  street  for  the  last  four  or  five  years  of  the  existence  of 
the  corporation  and  I  think  the  office  was  there  —  at  6  Harrison 
street  —  when  the"  suit  to  dissolve  it  was  begun.  I  remember  the 
suit  and  I  remember  it  was  dissolved  and  the  Consolidated  Milk 
Exchange  was  organized  in  "New  Jersey  shortly  thereafter  — 
"about  the  same  members" — "pretty  good  men."  We  held  the 
early  meetings  of  the  Consolidated  Milk  Exchange  near  the  ferry 
in  Jersey  City  and  continued  there  until  about  1900,  with  a  branch 
office  at  6  Harrison  street,  where  we  have  held  meetings  occa- 
sionally since;  most  of  them  at  6  Harrison  street,  New  York.  The 
Milk  Exchange,  Limited,  did  do  business  —  a  milk-selling  com- 
mission business. 

Q.  What  did  they  do  in  reference  to  the  prices  of  milk?  A. 
They  consulted  the  general  conditions  and  looked  after  the  general 
welfare  of  the  business  and  supply  and  demand,  and  guided  the 
general  condition  of  the  market,  the  higher  and  lower  price  through 
the  year  according  to  the  supply  and  demand  and  the  production 
of  the  good's.  After  a  discussion,  a  consensus  of  opinion  was  ob- 
tained as  to  the  value  of  milk.  This  price  did  not  govern  the 


212  [-SEX  ATE 

members  of  the  Consolidated  Milk  Exchange ;  there  was  no  by-law 
requiring  the  forfeiture  of  the  stock  unless  a  member  conformed 
to  the  prices  set  by  it.  I  don't  remember  the  by-laws  of  the  Ex- 
change, Limited,  referred  to  in  the  opinion  of  Judge  Haight.  I 
clon't  remember  that  any  such  by-taw  was  ever  acted  upon.  I 
think  a  card  was  sent  to  the  directors  of  the  Milk  Exchange, 
Limited,  to  advise  them  of  the  action  of  the  board.  I  was  not  the 
secretary  then.  No  notice  was  sent  to  stockholders.  I  believe  a 
little  niilk  journal  published  the  value  placed  by  the  board  and 
it  was  mailed  to  the  stockholders.  Mr.  M.  C.  Hall,  a  reporter, 
supplied  this  information  to  the  paper,  and  I  guess  the  "  Milk  Re- 
porter "  furnishes  information  to  the  public  of  the  action  of  the 
Consolidated  Milk  Exchange  in  practically  the  same  way. 

Q.  In  other  words,  the  work  of  the  board  of  directors  of  the 
Milk  Exchange,  Limited,  and  the  Consolidated  Milk  Exchange  in 
arriving  at  prices  was  practically  identical  I  A.  Xo,  it  is  not. 
The  difference  is  that  the  "  Limited  "  did  a  commission  business. 
"  We  never  make  prices  in  the  Exchange,  I  mean  on  the  Consoli- 
dated Exchange."  It  was  always  what  we  call  the  supply  and 
demand  were  discussed  and  the  shortage  or  the  flush  of  the  market, 
and  the  price  of  butter  and  the  price  of  cheese  and  the  price  of 
other  by-products,  what  milk  had  to  be  worked  up  into,  such  by- 
products were  considered,  and  then  what  they  call  they  found  that 
value  and  expressed  the  value  in  the  milk  market. 

Q.  And  that  list  of  values  was  gotten  up  by  the  Milk  Exchange, 
Limited,  wasn't  it  ?  A.  There  was  never  no  list  made  up.  The 
newspapers  then,  the  same  as  now,  get  up  the  news  to  publish  in 
their  papers  for  the  benefit  of  the  public  and  the  reporters  came 
to  the  Exchange  for  information.  The  method  of  arriving  at 
values  in  the  Milk  Exchange,  Limited,  and  the  Consolidated  Milk 
Exchange,  I  believe  was  about  the  same,  the  difference  being  that 
the  Limited  arrived  at  prices  and  the  Consolidated  said  nothing 
about  prices  at  all.  The  Consolidated  investigated  the  value  of 
milk.  The  method  of  arriving  at  values  by  both  companies  was 
about  the  same,  except  that  the  Milk  Exchange,  Limited,  did  a 
commission  business.  The  Consolidated  Milk  Exchange  sells  no 
milk,  but  looks  after  many  other  things,  such  as  stolen  cans,  stray 
cans,  bad  bills,  salaries  of  officers  of  the  corporation,  "  a  thousand 


213 

different  things  which  we  have  to  look  after."  We  attend  to  cer- 
tain things  of  common  interest  to  milkmen.  'There  are  many 
things  besides  arriving  at  a  value  of  milk  that  the  board  does. 
The  new  rules  and  regulations  of  the  board  of  health  and  the 
Agricultural  Department  have  to  be  looked  after.  Milk  has  ad- 
vanced owing  to  the  high  price  of  butter  and  cheese  and  the  pro- 
ducer has  had  his  selection  of  dealers.  "  He  didn't  care  anything 
for  the  Xew  York  milkmen,  whether  it  was  Borden  or  somebody 
else;  he  had  his  choice  and  he  was  the  boss  the  last  four  or  five 
years.''  The  farmer  kept  the  milk  home  if  he  could  make  more 
from  the  cheese  and  batter  factories.  There  has  been  a  shortage 
here  for  at  least  eighteen  months  or  two  years,  because  there  are 
a  lot  of  dairies  who  cannot  afford  to  ship  their  milk  and  .meet  the 
requirements  of  the  board  of  health  and  the  Agricultural  Der 
partment.  High  price  of  feed  and  cows  had  a  good  deal  to  do 
with  it  —  double  of  what  they  were  six  years  ago.  There  is  a 
scarcity  of  farm  help  and  this  causes  the  high  price  of  milk.  It- 
costs  to  handle  milk  now  40  or  45  per  cent,  more  than  it  did 
several  years  ago.  The  farmer  is  independent.  They  get  sixteen 
cents  for  skim  cheese  to-day,  woi'th  about  three  cents.  A  quart  of 
milk  costs  nine  cents  and  it  has  more  nourishment  than  five  pounds 
of  skim  cheese,  I  am  secretary  of  the  Consolidated  Milk  Ex- 
change, but  do  not  know  how  long  I  have  been,  but  have  been  since 
the  u  record  book,"  offered  in  evidence,  was  be-gun.  It  contains 
minutes  of  the  meetings  of  the  board  of  directors  of  the  Consoli- 
dated Milk  Exchange  from  January  9,  1906,  to  the  present  time. 
I  started  with  that  book  and  know  nothing  about  the  records  be- 
fore that  time.  I  do  not  know  who  the  former  secretaries  were,  I 
don't  remember  any  of  the  parties  that  kept  the  minutes. 

(The  minute  book  was  marked  in  evidence, -under  objection  by 
Mr.  Ely.) 

I  think  I.  C.  Jordan  kept  the  minute  book  before  I  did,  but  he 
is  dead.  I  have  charge  of  this  minute  book,  and  it  is  the  only 
one.  I  may  have,  but  don't  remember  keeping  the  minutes  be- 
fore those  in  this  book.  These  are.  the  present  by-laws  of  the 
Consolidated  Milk  Exchange. 

(Copy  received  and  marked  Exhibit  6.) 


214  [S>EX  ATE 

There  have  been  no  amendments  that  I  know  of.  If  there 
were  any  other  minutes,  they  would  probably  be  kept  in  Jersey 
City.  The  last  meeting  of  the  directors  was  held  last  Saturday 
in  Jersey  City.  I  don't  know  that  .there  are  any  amendments  to 
these  by-laws  —  any  amendments  which  show  the  minutes  except 
the  copy  of  by-laws  produced.  Minutes  were  often  taken  in  pencil 
and  copied  in  the  record  book  later.  I  have  none  of  the  minutes 
copied  in  pencil.  I  have  no  contracts  or  agreements  of  the  corpo- 
ration in  my  possession.  The  minute  book  and  the  by-laws  were 
given  me  when  I  became  secretary  —  the  list  of  stockholders  and 
the  stock  certificate  book,  too.  It  is  so  long  since  I  was  elected, 
that  I  do  not  recall  what  other  papers  I  got.  The  books  .and 
papers  are  kept  in  a  safe  in  Jersey  City  most  of  the  time  and 
the  record  book  is  carried  back  and  forth  from  here  to  Jersey  City. 
We  have  nothing  at  6  Harrison  street  and  the  certificate  book 
is  in  Jersey  City.  At  the  meetings  of  the  Consolidated  Milk  Ex- 
change, we  look  after  the  general  interests  of  our  business  — 
cans,  lost  property,  etc.,  and  also  look  after  the  general  legisla- 
tion needed  in  our  business.  We  had  a  legislative  committee  to 
look  after  the  legislation. 

(Paragraph  in  the  certificate  of  incorporation,  as  follows,  "  To 
promote  uniformity  and  certainty  in  the  customs  and  usages  of 
the  trade  "  speaks  for  itself  and  the  witness,  the  referee  held,  was 
not  qualified  to  elucidate  the  meaning  of  that  provision.  Cer- 
tificate of  incorporation  is  marked  "Ex.  1,  December  13,  1909.") 

We  got  permission  to  do  business  in  this  State  for  the  Consoli- 
dated Milk  Exchange  for  the  primary  purpose  of  being  able  to 
hold  and  convey  real  estate.  It  was  not  our  purpose  to  promote 
uniformity  and  values  in  milk.  Based  on  all  the  information 
we  could  get,  the  board  expressed  its  judgment  on  the  value  of 
milk.  In  regard  to  the  clause  to  promote  uniformity  in  trade,  we 
did  no  business  —  everybody  was  at  liberty  to  buy  cheaper  or 
higher  "  than  the  Exchange  price."  We  never  made  a  price  on 
milk.  It  is  immaterial  to  me  what  price  was  placed  on  it.  I 
had  to  pay  more  or  less,  depending  upon  the  supply  and  demand. 
We  were  always  trying  to  get  a  better  quality  to  satisfy  the  board 
of  health,  the  Agricultural  Department  and  the  public.  This  was 
one  of  the  main  object?,  and  to  talk  over  our  mutual  interests 


Xo.   45.]  215 

to  get  the  railroads  to  open  new  milk  routes.  When  several  men 
applied,  the  railroads  gave  more  consideration  to  the  application. 

Q.  Do  you  know  the  meaning  of  the  word  "  uniformity,"  Mr. 
Laemmle?  A.  Well,  I  suppose  if  we  have  one  bottle  of  milk, 
shake  it  up  well  and  split  it  in  half,  and  I  give  you  half  and  I 
take  the  other  half,  we  have  'uniformity  in  quality  and  uniform- 
ity in  measure. 

The  dealers  tried  to  improve  and  get  a  uniform  quality  of  milk. 
As  to  a  uniform  price,  "  The  Exchange  never  made  a  price." 
It  was  not  one  of  the  objects  of  the  Exchange  to  make  the  price 
uniform.  While  it  might  be  a  good  thing,  it  wTas  not  one  of  the 
objects  of  the  Exchange  to  procure  a  uniform  price  of  milk  in  the 
country.  There  are  a  great  variety  of  contracts  in  the  country  — 
some  by  the  month,  some  for  six  months. 

(Objects  of  the  corporation  read  in  evidence.) 

What  I  mean  by  uniform  quality  and  valuation  is  that,  "  if  we 
could  find  the  quality  of  milk  to  be  of  equal  quality  in  butter  fat 
and  so  on,  and  one  standard  could  be  had  for  that,  then  it  would 
be  an  easy  matter  to  bring  about  an  equal  quality  of  valuation." 
There  are  many  qualities  in  the  country  —  hardly  two  cows  alike, 
but  we  have  to  pay  the  farmers  their  price.  It  would  be  a  good 
thing  to  have  the  quality  of  milk  uniform,  "  as  a  five  cents  car 
fare  on  the  roads  here."  It  is  impossible  to  purchase  milk  re- 
quired for  this  city  "  at  an  even  price."  Quality  is  so  uneven 
-  "  differs  so  much  like  nickels  and  ten  cent  pieces."  I  mean 
to  differentiate  the  word  "valuation"  from  the  word  "price" 
in  this  way :  It  would  be  a  good  thing  to  have  a  uniform  quality 
of  milk  in  the  county  —  it  would  result  in  a  minimum  of  fines 
in  Xew  York.  I  mean  it  would  be  easier  to  form  a  valuation 
if  the  quality  was  equal  —  that  is,  an  even  quality  for  milk  like 
yon  have  for  flour  or  other  articles  of  commerce.  It  would  be 
desirable  to  have  a  uniform  price  paid  for  milk  of  a  uniform 
quality.  Under  such  circumstances,  it  would  be  easier  to  get  at 
the  valuation  of  milk.  I  don't  know  why  so  much  attention  is 
given  to  valuation. 

The  resolution  is  passed  and  I  write  it  down  —  I  confer  with 
no  one.  I  simply  write  down  the  resolution.  I  don't  know  that 
the  values  were  sent  to  the  "  Milk  Reporter."  I  don't  send  them. 


210  [SKXATK 

I  sell  very  little  bottle  milk  —  about  five  dozen  quarts,  and 
about  100  or  110  cans — forty-quart  cans  —  of  dipped  milk.  I 
don't  know  how  the  "Milk  Reporter1"  got  the  value*.  The 
reporter  of  the  "Milk  Reporter"  gets  the  prices  from  any 
one  he  can  and  wherever  he  can.  The  '*  Milk  Reporter  " 
gives  the  price  per  quart,  while  the  resolution  is  "  per 
40-quart  can."  It  may  figure  out  the  same,  but  I  don"t  know. 
The  members  do  not  consider  the  can  price  on  any  basis,  or  quart 
price,  because  they  all  buy  at  different  prices.  In  some  casi  s,  the 
can  price  and  the  quart  price  are  the  same,  but  in  other  Qaseg, 
the  milk  is  bought  on  contracts  or  on  butter  fat  or  total  solids, 
"and  there  are  a  hundred  different  ways  of  buying  milk  and  it 
may  figure  out  differently."  The  editor  of  the  "  Milk  Reporter  " 
may  make  the  price  without  knowing  the  values  fixed  by  the  Ex- 
change, but  I  think  he  gets  the  information  somewhere.  The 
Milk  Exchange  passed  a  resolution  as  follows:  "  AYe  find  the 
value  of  milk  to  be  $1.41  per  40  quarts,  h-ss  freight  charges  from 
each  respective  shipping  station,  together  with  an  allowance  of  r.r 
per  can  for  cartage."  I  do  not  know  how  often  I  have  bought 
on  Exchange  price.  I  don't  think  over  three  or  four  times  since 
I  have  been  secretary.  The  editor  of  the  "  Milk  Reporter"  is 
John  J.  Stanton.  He  would  ask  me  "  How  is  the  value'"  Mr. 
Campbell  testified  that  dealers  usually  manufacture  at  a  loss  and 
that  is  true.  "  When  butter  and  cheese  is  high,  I  am  sorry  to 
say  that  milk  men  or  shippers  have  none1  to  manufacture.  But  it 
is  just  then  when  we  sustain  a  loss,  when  the  market  is  glutted 
and  filled  up,  and  we  are  flush,  then  we  are  compelled  to  work 
off  our  surplus.  But  that  is  just  the  time  the  cheese  and  butter 
is  low.  That  brings  the  surplus  and  then  that  is  the  reason  there 
is  a  loss."  I  never  received  any  postal  card  from  the  "  Milk 
Reporter."  I  don't  know  who  gives  out  the  prices  to  the  "  Milk 
Reporter."  The  directors  called  each  other  on  the  telephone  and 
find  out  about  what  has  happened  and  the  papers  call  up  and 
find  out  if  there  is  a  change.  Xo  word  is  sent  out  by  the  di- 
rectors. The  practical  value  of  the  resolution  on  value  is  that  the 
members  can  find  out  what  it  is  by  inquiring  of  each  other.  They 
get  the  information  through  the  papers  and  "  we  cannot  help  it 
if  the  reporter  finds  out  something."  We  passed  a  resolution  to 


Ko.  4r>.'| 

find  out  where  we  stand  and  we  don't  care  whether  the  members 
know  it  or  not.  When  I  used  the  word  "  we  "  I  mean  the  milk 
dealers  in  general.  It  does  not  matter  whether  the  inquiry  comes 
through  a  member  or  not.  It  was  not  the  intention  that  the 
"  values  we  arrived  at  "  should  be  communicated  to  a  stockholder. 
We  did  not  intend  to  keep  the  information  to  ourselves.  I  don't 
know  what  we  intended  to  do  with  it.  After  taking  all  this  trouble 
of  passing  resolutions,  that  was  generally  the  end  of  it  and  the 
passing  of  resolutions  once  a  month  or  less  had  no  significance 
whatever.  The  members  had  to  go  out  and  pay  what  they  could 
get  the  goods  for.  We  had  much  other  business  to  attend  to 
besides  passing  on  value.  Our  minutes  show  something  about 
legislation  and  stolen  cans.  I  never  got  a  postal  card  like  Ex- 
hibit "  H,"  but  I  may  have  seen  one  not  five  times.  There  is  no 
blackboard  or  blotter  where  the  resolutions  on  values  appeared. 
Xo  one  was  especially  authorized  to  give  out  the  resolution  on 
values,  but  might  do  it  voluntarily.  The  resolution  had  no  other 
purposes  than  to  get  the  judgment,  that  is,  the  opinion  of  the 
majority  of  the  directors  of  the  value  of  milk  that  day.  The  di- 
rectors never  talked  about  the  price  to  the  consumer,  as  far  as  I 
know.  The  meetings  lasted  from  fifteen  minutes  to  an  hour  and 
were  generally  held  in  the  afternoon.  We  held  one  meeting  a 
month,  sometimes  two,  and  special  meetings  were  called  by  order 
of  the  president  or  three  directors.  I  sent  out  the  notices.  Some- 
times they  were  written  and  sometimes  they  were  oral  —  some- 
times by  telegraph.  I  never  read  the  certificate  of  incorporation. 
I  don't  think  I  ever  read  the  by-laws.  I  may  have  read  some 
paragraphs.  I  occasionally  had  to. 

I  paid  different  prices  for  milk  during  1907,  1908  and  1909. 
I  will  try  and  furnish  a  list  of  them  if  I  can  find  one.  It  costs 
me  to  handle  milk  at  the  creamery  one-half  cent  a  quart,  freight 
charges  about  three-fourths  of  a  cent  from  the  three  different 
freight  zones,  twenty-six  cents,  twenty-nine  cents  and  thirty-two 
cents  respectively ;  cartage  from  the  railroad  to  my  place  of  busi- 
ness one-fourth  cent  in  Manhattan  and  a  little  more  to  Brooklyn; 
and  delivery  to  stores  one-half  cent ;  this  is  for  can  or  dip  milk. 
Two  cents  covers  every  item  of  expense  in  the  handling  of  a  quart 
of  dip  milk  from  the  time  I  get  it  from  the  producer,  until  I  de- 


218  |  SENATE 

liver  it  to  the  consumer,  not  including  investment  and  bad  collec- 
tions. "  Bad  collections  are  heavy,  expecially  in  the  dip  or  can 
milk  and  on  the  two  cents  I  have  not  made  any  allowance  for  bad 
debts."  There  is  also  a  heavy  loss  on  sour  milk.  I  have  no  direct 
deliveries  from  the  farmer.  All  is' delivered  to  the  stations  in  the 
country.  I  assume  all  the  responsibility  of  delivery  from  the 
farmer  to  the  consumer.  Outside  of  the  items  mentioned,  includ- 
ing ice,  two  cents  eoVtrg  entire  cost  from  producer  to  consumer. 
Ice  has  been  twice  as  expeii-ive  this  y<  ar.  In  ordinarv  years,  two 
cents  Avould  cover  the  cost.  It  is  much  more  expensive  to  deliver 
bottle  milk.  I  only  deliver  about  five  dozen  bottles.  Mine  is  a 
close  corporation  and  has  paid  no  dividends.  I  have  drawn  out 
only  wages  from  the  corporation — only  about  $-0  a.  week ;  my  son, 
who  is  treasurer,  drew  $15,  and  no  other  number  of  my  family 
draws  out  anything.  One-quarter  of  a  cent  a  quart  might  cover 
the  loss  through  bad  debts,  sour  milk,  extra  ice,  my  .-alary,  depre- 
ciation and  so  forth.  I  was  not  present  at  the  meeting  of  the 
board  of  the  Consolidated  Milk  Kxchange  some  time  during  the 
fall  called  to  consider  raising  the  price  of  milk  to  the  consumer, 
and  no  such  meeting  was  ever  callul  to  my  knowledge.  The  Con- 
solidated has  nothing  to  do  with  that.  Neither  was  there  any 
meeting  called  to  reduce  the  price.  I  heard  talk  among  dealers 
wondering  what  they  were  going  to  do  if  the  prices  continued  to 
go  higher,  but  I  was  away  in  the  country  and  did  not  know  that 
the  price  had  gone  to  nine  cents. 

Q.  Now,  previous  to  November  1.  11M)1»,  you  bad  considered 
the  advisability  of  advancing  the  price  of  milk,  had  you  not?  A. 
I  always  thought  we  were  paying  more  than  we  got  for  it  and  I 
offered  my  business  for  sale  to  quite  a  large  niiml  er  of  men,  and 
stated  so  in  the  open  meetings,  that  I  am  ready  to  sell  out  at  any 
time.  I  think  I  advanced  the  price  of  dip  milk  about  November 
1st,  not  a  cent  a  quart  —  I  think  I  advanced  dip  milk  about  one- 
quarter  of  a  cent.  Dip  milk  is  my  principal  business,  but  T  sell  a 
little  to  the  consumer,  and  that  I  sold  at  nine  cents  after  Novem- 
ber 1st.  I  advanced  it  after  my  son  came  home  and  told  me  that 
different  parties  had  advanced  prices  on  November  1st  and  we 
simply  followed  that  price.  The  retail  price  was  not  discussed 
by  the  board  of  directors.  I  was  not  interested  in  it.  I  dis- 


Ko.  45.]  219 

cussed  with  Mr.  Beakes  the  market  conditions,  saying  that  we 
had  to  pay  much  more  for  the  milk  in  the  country  to  get  enough 
to  supply  the  trade  and  that  butter  and  cheese  factories  were 
paying  so  much  more.  We  said,  "  What  can  we  do  ?  "  Our 
strongest  competitor  last  year  was  the  manufacturing  market. 
This  market  was  higher  this  year  than  any  time  since  the  war. 
The  market  conditions  were  discussed  by  dealers  and  they  com- 
plained that  they  could  not  pay  their  bills.  They  had  to  put 
notes  in  the  bank  and  borrow  money  and  I  think  these  matters 
were  discussed  with  Mr.  Beakes,  on  our  way  home  from  a  meet- 
ing, not  at  SL  session  of  the  directors ;  talk  among  the  dealers  gen- 
erally with  reference  to  the  advisability  or  necessity  of  advancing 
the  price  of  milk  was,  I  suppose,  in  reference  to  the  retail  market. 
I  am  in  the  wholesale  business,  just  a  shipper  of  milk.  I  never 
saw  or  heard  of  any  written  agreement  among  the  dealers  agree- 
ing to  advance  the  price  of  milk  about  November  1st. 

Q.  Was  not  the  general  consensus  of  opinion  that  if  Bordens 
were  advancing  the  price  of  milk  that  all  the  other  dealers  would 
do  it  ?  A.  I  believe  the  small  dealers  would  feel  relieved  if 
Borden  would  raise  it.  because  Borden,  with  their  very  large 
capital,  could  hold  out  longer  than  an  independent,  poor  dealer. 

Before  Xovember,  the  dip  milk  in  my  stores  was  six  cents  and 
I  raised  it  to  seven  cents  about  the  6th  of  Xovember,  and  bottle 
milk  was  raised  one  cent  also. 

By-laws  provide  for  several  different  committees  and  there  may 
be  a  committee  on  values.  I  think  that  committee  in  1909  was 
composed  of  the  whole  board,  seventeen  in  all,  they  were  all  there. 
Nine  made  a  quorum.  If  there  was  no  more  present,  nine  mem- 
bers might  establish  a  value.  I  don't  know  whether  any  member 
of  the  board  was  ever  authorized  to  give  out  the  values  fixed  at 
the  meetings.  It  was  generally  understood  that  any  member 
might.  I  simply  telegraphed  my  stations  in  the  country  that  I 
would  pay  so  much  for  milk  from  such  a  date  until  further  notice. 
Sometimes  we  changed  a  price  without  a  meeting,  but  usually 
right  after  a  meeting.  We  used  the  Exchange  valuation  as  a  basis 
—  sometimes  paid  more  and  sometimes  less.  The  loss  through 
sour  milk  falls  on  the  dealer. 

I  did  not  discuss  the  advance  of  the  price  of  milk  with  Mr. 
Beakes.  I  was  up  the  State  in  one  of  my  creameries  for  three  or 


•2-20  ['SENATE 

four  days  at  that  time.  It  was  not  discussed  for  weeks  prior  to 
November  1st,  as  far  as  I  know,  except  that  dealers  talked  over 
the  high  cost  due  to  high  prices  in  the  county  at  cheese  factories, 
etc.  Nothing  was  said  about  the  retail  price.  I  said  I  was  losing 
money  on  both  bottle  and  dip  milk  and  I  didn't  propose  to  do 
anything  about  rendering  my  business  more  profitable  except  to 
get  as  much  for  my  milk  as  anybody  else.  The  time  I  spoke  to 
Mr.  Beakes  was  when  milk  got  short  in  September.  What  I.  said 
to  him  was,  "  JIow  are  we  going  to  get  milk  and  keep  it,  with 
the  strong  competition  of  the  manufacturing  market/'  and  he  said, 
"  I  don'tJmow." 

I  saw  Mr.  Gorman  in  the  aldermanic  chambers  at  a  hearing, 
I  think  in  April,  1909.  I  had  not  known  him  before  that  time. 
He  introduced  himself  to  me.  He  said  he  would  come  in  the 
morning  to  see  me.  T\vo  days  afterward  I  sawT  him  at  my  office. 
He  proposed  an  advertising  scheme.  "  He  talked  at  length  against 
the  idea  of  Xathan  Strauss  pasteurizing,  that  he  is  simply  stuck 
on  his  pasteurization  and  he  wants  to  sell  plants,  and  he  proposed 
through  sensible,  educational  articles,  in  the  paper  he  represented, 
which  was  the  "'  Tribune/'  that  he  would  show  up  to  him  and  some 
other  of  the  members  that  it  is  not  necessary  to  have  good,  sound, 
fresh  milk  pasteurized,  if  this  milk  is  properly  taken  care  of." 
"  When  I  saw  his  bill  of  expense,  I  simply  dropped."  I  said, 
li  There  is  not  as  much  money  amongst  the  milkmen."  He  was 
down  at  the  Exchange,  but  not  at  a  meeting.  There  were  six  or 
seven  members  of  the  board  who  met  Mr.  Gorman  in  the  rooms 
of  the  Exchange  and  I  was  one  of  them.  He  proposed  the  same 
scheme  to  them.  He  said  the  reason  milk  was  selling  so  poorly 
wras  on  account  of  the  tuberculosis  exhibition  at  the  Museum  of 
Xatural  History.  I  wanted  to  show  the  whole  matter  up  —  I 
dropped  it  at  that  time.  Mr.  Gorman  wanted  for  his  educational 
article  $5,000. 

Exhibit  3  is  a  list  of  dealers,  and  I  put  down  a  few  names  and 
told  him  to  get  them  first,  saying  if  they  aren't  willing,  I  cannot 
afford  to  pay  it.  There  is  some  of  iny  handwriting  on  Exhibit  3. 
I  wras  willing  to  pay  my  share  to  teach  the  public  what  milk  is. 
"  They  don't  know  to-day  what  milk  is."  Such  a  campaign  of 
education  would  bring  about  larger  sales  of  milk.  I  don't  lose 


'No.  45.]  221 

money  on  the  sale  of  milk  all  the  year  round.  Nothing  was  said 
about  educating  the  public  to  the  advanced  price  for  milk. 

By  resolution,  milk  dealers  outside  of  the  Exchange  were  often 
given  the  privilege  to  come  in.  They  were  never  refused.  The 
meetings  were  not  secret.  Such  was  the  general  custom.  I  saw 
Exhibit  No.  1  in  the  "  World  "  and  I  think  Mr.  Gorman  begged 
to  get  my  signature  on  it,  stating  that  if  I  signed,  others  would 
follow,  and  I  rejected  it  because  I  didn't  like  his  idea ;  it  was 
simply  working  a  scheme  to  make  money.  Exhibit  No.  4  is  the 
names  of  the  stockholders  and  a  ballot  for  the  annual  election  for 
January,  1909.  I  believe  it  is  correct,  I  never  saw  Exhibit ••'No. 
2  before.  Mr.  Gorman  is  in  error  when  he  says  the  campaign 
was  wanted  to  raise  prices.  The  price  was  advanced  in  1907.  I 
think  the  raise  was  in  November,  1907.  I  was  selling  milk  at 
eight  cents  at  that  time  and  didn't  advance  it.  The  first  time  I 
advanced  milk  was  on  November  1,  1909,  to  nine  cents  a  quart. 
At  the  same  time,  I  advanced  dip  milk.  I  don't  think  I  advanced 
dip  milk  in  1907. 

The  Distributors'  Realty  Company  is  a  real  estate  company. 
It  bought  all  its  holdings  of  real  estate  from  the  Consolidated 
Milk  Exchange,  and  the  stock  of  the  Consolidated  Milk  Exchange 
reduced  $2  per  share.  I  think  this  is  about  one  and  one-half 
years  ago.  I  have  been  a  stockholder  and  director  of  the  Dis- 
tributors' Realty  Company  since  its  incorporation  and  treasurer 
only  lately,  and  I  am  also  secretary  and  have  the  books,  all  of 
which  are  in  New  York.  I  can  produce  them  and  I  certainly 
will  at  the  next  meeting. 

The  Mutual  Aid  'Society  is  five  or  six  years  old.  The  Con- 
solidated Milk  Exchange  has  $1,500  in  cash  but  nothing  else  ex- 
cept a  few  dollars  that  may  have  come  in  from  collection  of  dues. 
The  man  who  owns  the  cans  pays  for  their  collection. 

I  am  a  stockholder  and  director  of  the  Dairymen's  Manufac- 
turing Company,  but  am  not  an  officer.  It  was  organized  to 
manufacture  cans,  tinware  and  milkmen's  supplies,  under  the 
laws  of  the  State  of  New  York.  Not  all  Exchange  members  are 
members  of  it.  The  majority  might  be. 

(Certificate  of  incorporation  of  the  Dairymen's  Manufacturing 
Company  received  in  evidence  and  marked  Exhibit  7  and  copied 
in  the  record.) 


[SENATE 

I  know  Mr.  Beales  among  the  incorporators.  He  is  not  a' mem- 
ber of  the  Exchange.  I  don't  remember  if  the  incorporators  were 
milk  dealers  or  if  they  are  stockholders  at  present. 

i  Certificate  of  payment  of  one-half  of  the  capital  stock  of  the 
Dairymen's  Manufacturing  Company  received  in  evidence,  and 
marked  Exhibit  8.) 

Of  the  incorporators  I  think  Mr.  Beakes  and  several  other 
members  are  members  of  the  Consolidated  Milk  Exchange. 

I  went  to  the  meeting  of  the  board  of  alderinan,  where  I  saw 
Mr.  Gorman,  because  I  wanted  to  go  to  any  place  where  there  is 
anything  to  be  learned  in  the  milk  l>;isine>>.  Mr.  Beakes  stated 
that  a  campaign  of  education  should  have  been  started  long  ago, 
hut  did  nut  make  that  statement  at  a  meeting  of  the  Consolidated 
Milk  Exchange.  It  was  an  urea-ion  where  Gorman  got  a  few 
friends  together  —  men  of  the  milk  business.  In  one  of  the 
rooms  where  the  Consolidated  Milk  Exchange  held  meetings, 
-Mr.  Heakes  did  make  that  statement,  saying  that  the  public  ought 
to  have  been  enlightened  about  milk  and  about  fairness  and  the 
quality  of  milk  long  before  this.  He  didn't  say  that  if  the  public 
had  been  enlightened  they  could  advance  the  price  of  milk.  Xo 
statement  about  advancing  the  price  of  milk  was  made  at  that 
time.  The  papers  had  said  so  much  about  contagious  diseases 
and  germs  in  milk  that  the  sales  dropped  off.  Gorman  said  he 
was  the  man  to  bring  about  *'  the  natural  sale  again,  for  a  com- 
pensation/' I  don't  think  I  had  anything  to  say  to  Mr.  Gorman 
except  about  the  subject  of  his  inquiry.  The  questions  that  arise 
about  cans,  etc..  come  up  sometimes  before  and  sometimes  after 
meetings.  The  small  details  are  not  always  mentioned  in  the 
minute  book.  I  don't  remember  anything  was  said  about  Bor- 
dens  joining  in  the  campaign  of  education.  With  reference  to 
the  raising  of  the  price  about  Xovember  first,  '*  I  believe  it  was  an 
unavoidable  condition."  "  I  believe  it  could  not  be  done  other- 
wise, unless  the  men  in  business  would  work  at  a  loss.  That  is 
my  honest  conviction.  It  could  not  be  avoided."  Prices  paid  at 
the  present  time  are  higher  than  for  some  years  back.  The  milk 
dealers  must  run  short  for  two  or  three  months  in  paying  their 
bills.  The  Borden  price  and  the  Milk  Exchange  price  were 
higher  in  1908  than  in  1909,  but  that  was  an  exceptionally  dry 


Xo.  45.]  223 

year.  Had  to  get  milk  from  a  great  distance.  The  majority  of 
dealers  own  creameries  or  stations  in  the  country.  Most  ship- 
ments are  by  rail.  There  are  freight  zones  fixed  by  the  Interstate 
Commerce  Commission,  as  follows:  Forty  miles,  twenty-three 
cents  on  a  forty-quart  can.  The  next  is  twenty-six  for  sixty  miles 
and  thirty-two  cents  for  all  over,  and  there  is  a  percentage  off  for 
carload  lots.  A  little  milk  goes  by  boat.  Eight  freight  rates 
mentioned  in  the  September  number  of  the  "  Milk  Reporter  " 
may  be  correct,  except  as  to  the  carload  lots. 

("Milk  Reporter"  marked  Exhibit  9.) 

It  is  difficult  to  determine  who  would  get  the  benefit  of  any 
advantage  in  freight  rate  by  reason  of  a  cheaper  water  rate.  It 
is  always  a  matter  of  contract.  The  rates  on  bottle  milk  are 
always  higher.  The  freight  rate  on  bottle  milk  is  from  a  fraction 
under  to  a  fraction  over  a  cent  per  quart.  The  railroads  get  their 
cash  from  freight  on  the  platform  and  whoever  takes  it  away  pays 
tor  it.  I  think  J.  E.  Wells,  Thomas  B.  Habison.  C.  H.  C.  Beakes, 
William  C.  A.  Witt  were  members  of  the  Milk  Exchange,  Limited. 
J  don't  know  which  of  the  Sanfords.  J.  V.  Jordan,  I  think,  was 
u  member  of  the  Exchange,  Limited,  and  also  I.  C.  Jordan.  I 
don't  remember  about  Fred  H.  Beach;  George  Slaughter  was  a 
mc-mber  of  the  Limited,  also  Mr.  William  A.  Wright,  I  don't 
know  where  the  records  are  of  the  Milk  Exchange,  Limited,  or  who 
preceded  me  as  secretary,  and  I  don't  think  the  records  are  avail- 
able now.  I  don't  think  there  ever  was  a  Committee  on  Sales  and 
Price  in  the  Consolidated  Milk  Exchange.  We  never  made  any 
sales.  '  The  resolution  in  my  handwriting  referred  to  the  Price 
and  Sales  Committee  "  may  be  a  mistake  in  my  writing.  We  had 
no  Price  and  Sales  Committee.  "  It  was  simply  a  committee  to 
get  information  and  to  express  their  opinion  according  to  the 
supply  and  demand  on  the  value  of  goods."  I  think  that  com- 
mittee was  the  whole  board.  I  cannot  remember  who  was  on  the 
Price  and  Sales  Committee  referred  to  in  the  minutes  of  February 
27,  1907.  I  think  that  statement  of  Price  and  Sales  Committee 
was  a  mistake  in  my  writing.  There  never  was  a  Price  and  'Sales 
Committee.  This  mistake  might  have  been  made  by  me  several 
limes.  I  do  not  recollect  that  we  wanted  the  names  of  the  com- 
mittee not  to  appear.  In  each  case  where  the  Price  and  Sales 


224  [SEXATE 

Committee  is  referred  to,  it  may  have  been  a  mistake,  made  by 
me  in  referring  to  the  committee  as  a  "  Price  and  Sales  Com- 
mittee."    I  do  not  think  that  there  is  any  resolution  passed  at  an 
annual  meeting  appointing  such  a  committee.     If  I  have  recorded 
anything  of  the  business  of  such  a  committee  it  is  a  mistake,  and 
if   there  was   such   a  committee  it   was   without   my   knowledge. 
This  was  a  committee  on  values  to  express  their  best  judgment  as 
to  the  value  of  milk,  and  I  don't  know  why  it  was  so  called.     If 
the  Executive  Committee  did  any  business,  I  don't  know  anything 
about  any  records  having  been  kept  of  it.     Whatever  reports  thev 
made  were  made  verbally.     1  don't  know  that  any  records  were 
kept  of  the  January  31,  1906,  and  the  January  13,  1908,  meetings 
of  the  Executive  Committee.     I  never  was  a  member  of  such  a 
committee.     I  cannot  offer  any  explanation  if  it  appears  that  all 
of  the  committees  are  named  except  the  Committee  on  Values. 
I  never  got  any  instructions  to  insert  the  names   of  the  Price 
and    Sales    Committee    in    the    minutes.     I    cannot    give    any 
explanation  that  their  names  are  not  there.     The  Legislative  Com- 
mittee  looked   after  the  legislation   at   Albany.      We  wanted   no 
change  in  the  law  as  it  now  stands  with  reference  to  the  le.ui- 
lation  of  the  case,  that  is,  the  cases  of  lost  cans  should  lie  tried  in 
the  county  in  which  the  owner  resides.     The  expenses  of  the  com- 
mittee was  secured  by  collection  and  the  collection  was  obtained 
from  large  dealers  without  regard  to  membership  in  the  exchange. 
I  don't  remember  that  I  was  secretary  before  January  9,  1  !><><;. 
and  no  separate  book  was  kept  in  the  Jersey  office.     I  kept  no 
books  at  home.     I  kept  the  minutes  on  a  piece  of  paper,  then 
copied  them  in  the  book.     Any  minutes  that  there  may  be,  miiiht 
be  in  Jersey,  and  we  had  the  privilege  of  putting  such  things  in 
the  Dairymen's  Manufacturing  Company's  safe.     They  may   he 
there  now.     I  have  no  personal  objections  to  looking,  and  will, 
with  the  consent  of  counsel.     If  I  were  being  advised  by  counsel 
to  the  contrary,  I  would  not  produce  them.     I  don't  know  of  any 
other  minute  book  than  the  one  in  evidence.     The  paper  torn  from 
the  inside  of  the  cover  on  the  minute  book  in  evidence  was  a  form 
used  for  calling  meetings  and  proxy.    I  guess  it  is  true  that  about 
eighteen  meetings  were  called  during  the  last  three  or  four  years, 
especially  when  the  Board  was  called  to  consider  the  value  of  milk. 


No.  45.]  225 

Any  time  something  important  came  up  and  we  could  not  afford 
to  wait  for  meeting,  we  called  a  special  meeting.  I  called  these 
meetings  because  the  president  ordered  me  to. 

Q.  Well,  now,  why  did  you  deem  it  necessary  to  call  a  special 
meeting  of  the  directors  to  consider  the  value  of  milk  or  to  request 
it?  A.  Well,  sometimes  in  my  own  judgment  I  found  the  goods 
which  were  handled  were  very  scarce,  supply  and  demand  and 
manufacturing  market  being  very  high,  and  we  were  losing  dairies 
and  the  market  was  very  short  here,  and  consequently  I  felt  that 
an  expression  as  to  our  judgment  would  elevate  the  value  of  the 
goods  so  the  goods  would  come  in  this  market. 

Q.  Well,  how  would  that  bring  goods  to  this  market  ?  A.  If  a 
higher  value  would  be  found,  in  my  judgment  goods  would  come 
forward.  An  expression  of  opinion  by  the  Board  would  have  an 
effect  upon  those  who  decided  to  follow  it.  The  majority  of  deal- 
ers do  not  necessarily  follow  the  market  or  valuation  expressed  by 
the  exchange.  If  a  higher  price  was  placed  on  milk,  it  would 
encourage  the  farmers  to  ship  their  milk  instead  of  making  it  into 
butter  and  cheese.  The  farmers  send  it  where  they  get  the  most 
money. 

Q.  Well,  then,  if  he  didn't  hope  to  get  the  Exchange  price, 
how  would  it  encourage  him  (the  farmer)  to  send  his  milk  to 
New  York  ?  A.  The  value  found  by  the  Consolidated  Exchange 
had  no  bearing  on  the  general  market. 

Q.  (repeated).  Well,  then,  if  he  didn't  .hope  to  get  the  Ex- 
change price,  how  would  it  encourage  him  to  send  his  milk  to 
New  York?  A,  For  certain  reasons,  there  are  other  prices  pre- 
vailing which  might  be  higher  or  lower,  other  milk  buyers.  If 
the  farmer  would  find  the  value  of  the  Exchange  higher  than 
any  other  milk  buyer,  he  would  naturally  select  the  price  found 
by  the  Board  of  Directors,  that  is,  the  value. 

I  said  that  the  raising  of  the  price  by  the  Board  of  Directors 
of  the  Exchange  would  encourage  farmers  to  send  milk  to  New 
York,  providing  there  would  be  nobody  paying  higher  prices. 
Milk  held  under  contract  I  don't  think  would  be  affected  by  the 
Exchange  value,  I  do  not  recall  that  the  raising  of  the  value 
by  the  Consolidated  Milk  Exchange  over  influenced  the  farmers 
to  send  milk  to  New  York.  Contracts  made  with  the  farmers 


'   226  [SENATE 

based  upon  Exchange  prices  would  be  affected  by  raising  or 
lowering  the  valuation  by  the  Board,  generally.  If  the  Eixchange 
here  lowers  or  raises  the  price,  then  the  dealer  under  his  con- 
tract lowers  or  raises  the  amount  that  he  pays  the  farmer  for 
milk.  I  know  that  many  special  meetings  were  called  —  some  to 
consider  the  value  of  milk  and  for  other  purposes.  I  cannot 
recall  all  the  reasons  now.  I  don't  know  how  the  resolution  of 
the  Board  would  affect  the  supply  and  demand.  The  only  things 
done  at  the  meeting  held  on  the  22d  of  November,  1909,  in 
Jersey  City  was  to  investigate  the  matter  of  a  number  of  stray 
cans  and  passing  of  a  resolution  revoking  our  license  to  do  busi- 
ness in  the  State  of  New  York.  I  always  selected  the  particular 
form  of  expression  for  describing  the  action  of  the  Board  when 
it  passed  upon  the  value  of  milk  and  the  insertion  of  the  word 
"  price  "  in  the  place  of  "  value  "  on  certain  occasions  was  my 
mistake,  and  no  one  ever  instructed  me  as  to  the  particular  form 
of  the  resolution.  I  was  never  told  that  it  would  be  illegal  to 
use  the  word  "  price."  I  didn't  use  the  won  I  "price"  because 
"we  never  considered  that  we  make  any  price  for  anything.  We 
just  express  the  value  of  the  goods." 

I  remember  the  communication  of  September  26,  1906,  in  ref- 
erence to  the  Pomona  Grange  and  the  minutes  of  September  26, 
1906.  that  was  about  the  admission  of  members  of  the  grange 
to  the  Consolidated  Milk  Exchange.  It  is  customary  a-t  the  first 
meeting  every  year  to  make  the  Committee  on  Values  consist  of 
the  full  board.  I  don't  think  that  the  Committee  on  Amend- 
ments to  by-laws  ever  did  anything.  The  committee  provided  for 
in  the  minutes  of  May  29,  1907,  was  a  committee  to  change  a 
mortgage,  I.  believe.  That  is  all  the  committee  did.  On  the 
matter  of  appointment  of  these  committees,  anything  I  say  is 
only  a  matter  of  memory.  To  my  knowledge,  the  Rules  and 
Regulations  Committee  did  nothing.  We  did  have  an  ad  in  the 
"  Milk  Reporter,"  and  we  did  insert  a  resolution  on  the  death 
of  a  member.  The  Consolidated  Milk  Exchange  never  owned  a 
safe  since  I  was  secretary.  There  are  none  of  the  books  in  the 
safe  of  the  Creamery  Mutual  Aid  Society.  I  at  one  time  was 
ordered  to  get  someone  to  open  the  safe. 

I  was  present  at  6  Harrison  street  when  Mr.  Gorman  was 
there  and  a  number  of  the  directors,  but  I  don't  remember  that 


No.  45.]  227 

proof  of  articles  were  to  be  submitted  to  a  committee  for  ap- 
proval. Mr.  Gorman  stated  he  would  not  start  printing  anything 
until  he  had  the  money  matter  fixed,  but  copy  was  to  be  sub- 
mitted for  approval,  but  I  do  not  think  any  particular  person 
was  to  approve  the  copy.  I  have  no  recollection  of  ever  having 
made  the  remark  "  that  we  had  paid  more  than  three  times  this 
amount,  namely  $5,000,  on  things  that  we  have  gotten  no  bene- 
fit from/'  I  said  to  Gorman  after  he  had  explained  his  propo- 
sition, "  You  can  see  the  men  and  see  whether  you  succeed.  I 
doubt  it  very  much."  And  that  is  all  I  said  to  him.  I  was 
reasonably  sure  that  he  could  not  succeed.  I  have  no  recollection 
of  showing  him  the  paper.  He  showed  me  a  lot  of  newspaper 
dippings,  etc.,  showing  what  he  had  done  with  the  beef  for  the 
butchfTS  and  for  the  brewers  a  few  years  ago  —  there  were 
certain  articles  against  beer  and  against  meat,  and  he  fixed  them 
all  up,  and  he  got  them  all  straightened  out,  and!  he  could  do 
wonders  for  us.  I  don't  remember,  but  I  might  have  said  it  in 
a  joke,  "  Some  of  those  fellows  will  talk  like  a  lot  of  smart 
Yankees,  but  the  way  to  do  it  is  to  get  their  names  down."  Fre^ 
quently,  when  there  is  a  deficit  a  few  have  to  make  it  up.  "  I 
said  that  I  would  be  willing  to  pay  my  share  "  to  enlighten  the 
public  about  the  nourishing  quality  of  milk  which  nine  out  of 
ten  don't  know.  T  think  Mr.  Gorman  showed  me  a  list  of  dealers 
with  letters  after  the  names,  and  I  think  I  stated  that  that  was 
all  right.  I  have  an  arrangement  with  Mr.  R.  B.  Baker,  and 
he  orders  milk  from  me,  and  I  ship  it  to  him.  The  first  of  the 
season  I  sold  him  over  the  Exchange,  and  now  I  get  a  little, 
above  Exchange,  because  it  is  hard  to  get  milk.  I  have  nothing 
excerpt  a  verbal  contract  with  him, —  only  an  understanding. 
Under  my  understanding  with  him,  the  price  does  not  depend 
upon  the  Exchange  price.  "  Sometimes  when  milk  is  flush,  he 
gets  the  best  of  me,  and  when  milk  is  short,  I  get  the  best  of 
him."  We  had  a  fixed  price  for  April,  another  for  May  and 
another  for  June,  and  at  the  present  time  he  pays  me  ten  cents 
above  general  market.  That  is  the  value  found  by  the  Exchange. 


228  [SENATE 

COPY  OF  .FORM  OF  RESOLUTION  USUALLY  PASSED  BY  THE  DIREC- 
TORS  OF  THE   EXCHANGE  WHEN   PASSI.\<;   UPON  THE   VALUE 
.OF  MILK. 

Resolution  passed  March  13,  1906.  We  find  the  value  of  milk 
to  be  $1.41  per  forty  quarts,  less  freight  charges  from  each  re- 
spective shipping  point  together  with  an  allowance  of  five  cents 
per  can  for  cartage. 

WILLIAM  A.  LAWRENCE  : 

I  reside  at  Chester,  N.  Y.,  and  am  engaged  in  the  milk  busi- 
ness under  the  name  of  Lawrence  &  Son,  and  I  am  the  owner.  I 
produce  milk  and  own  two  farms.  I  manufacture  cheese  from 
my  own  milk,  as  well  as  from  milk  that  I  buy.  I  think  I  was 
a  member  of  the  old  Milk  Exchange,  Limited.  I  am  a  stock- 
holder of  this  Consolidated  .Milk  Exchange.  I  have  never  been 
an  officer  or  director.  I  think  I  have  been  present  once  or  twice 
at  meetings  of  the  board  of  directors  of  the  Consolidated  Milk 
Exchange.  I  bought  my  stock  several  years  ago,  and  have  been 
a  member  since  its  organization  in  1895.  I  have  15  shares  I 
think.  I  derive  some  benefit  from  owning  stock  m  the  exchange 
in  that  I  made  use  of  the  valuations  arrived  at  by  the  board  of 
directors  of  the  Consolidated  Milk  Exchange  in  reference  to  the 
milk,  I  bought  my  milk  based  on  the  prices  of  the  milk  ox- 
change.  The  New  York  price  was  known  as  the  milk  exchange 
price.  I  am  informed  of  the  valuation  arrived  at  by  the  board 
of  directors  of  the  Consolidated  Milk  Exchange,  through  my 
patrons,  different  newspapers,  and  the  "  Milk  Reporter."  I 
think  I  also  got  post  cards  from  the  "  Milk  Reporter."  I  may  have 
got  information  over  the  'phone  as  to  the  price  arrived  at  by  the 
directors ;  I  don't  remember.  I  never  knew  of  any  agreement  as 
to  price,  because  my  understanding  was  that  they  made  no  price. 
They  simply  said,  "  We  find  the  milk  is  worth  so  much  now  until 
further  notice."  I  never  heard  of  any  agreement  among  the 
members  of  the  exchange  to  stand  by  the  valuations  fixed  by  the 
board  of  directors  to  the  extent  of  buying  and  selling  milk  only  at 
that  valuation.  I  only  heard  rumors  from  outside  people  talking 
•about  it,  but  never  considered  myself  bound  to  buy  at  any  of  the 
prices  they  should  establish.  I  saw  by  the  paper  that  the  retail 
price  of  the  bottle  milk  to  the  consumer  in  Xew  York  city  was 


Xo.   45.]  229 

raised  by  the  majority  of  milk  dealers  about  November  first  from 
eight  cents  to  nine  cents  a  quart.  I  think  there  is  a  flush  of  milk 
in  my  locality  at  the  present  time,  either  due  to  overproduction  or 
lack  of  consumption  in  the  city.  In  iny  opinion,  an  overproduc- 
tion or  surplus,  such  as  exists  at  the  present  time,  would  tend  to 
cheapen  the  price.  My  explanation  of  why  the  price  does  not 
come  down  now  is :  If  the  price  of  my  goods  falls  off,  instead  of 
manufacturing  it  into  'something  else,  I  don't  go  to  work  and  re- 
duce my  price  right  away,  because  I  am  after  the  revenue ;  I  keep 
that  up  and  take  my  loss  at  the  other  end  of  it,  same  as  a  man  has 
a  lot  of  milk,  he  puts  out  fifty  cans  a  day  and  he  is  three  or  four 
cans  over,  he  better  dump  that  into  the  gutter.  They  better  take 
the  profits  as  they  can  get  it  and  do  something  with  the  other; 
throw  the  balance  away.  When  there  is  a  surplus,  the  milkmen 
and  dealers  hold  the  surplus  in  their  country  stations  and  only 
ship  what  the  market  will  take.  They  ice  up  the  cream  and 
hold  it.  I  have  held  it  myself  for  a  month.  I  have  kept  milk  for 
a  week,  but  think  it  could  be  kept  for  10  days.  I  have  iced  300 
or  400  cans  and  held  it  over  for  a  month  and  then  shipped  it  off 
to  take  care  of  the  hot  weather  trade.  It  was  shipped  to  New 
York.  I  do  not  know  whether  it  was  for  the  breakfast  table  or 
for  ice  cream.  I  have  heard  of  cream  being  separated  from  the 
milk;  that  is,  enough  cream  taken  out  so  that  the  milk  would  just 
contain  enough  butter  fat  to  be  within  the  law,  but  I  have  never 
known  of  it  being  done.  The  DeLeval  Separator  can  be  regu- 
lated so  as  to  take  off  the  excess  cream  and  leave  3  per  cent,  butter 
fat.  I  have  no  figures  to  state  the  cost  of  production  of  milk.  In 
the  flush  season,  when  milk  is  cheap,  the  cream  may  be  held  a 
month  later  and  then  sold  at  a  higher  price.  This  custom  pre- 
vails. I  keep  track  of  the  exchange  prices.  I  give  my  customers 
the  option  of  -selling  me  either  at  the  exchange  price  or  Borden's 
price.  In  my  opinion,  Borden  and  the  exchange  prices  are  prac- 
tically the  only  two  prices  the  farmer  can  choose  between  in  our 
part  of  the  country.  Borden's  people  are  buying  about  forty 
cans  a  day  and  I  am  buying  a  little  over  300,  so  you  can  draw 
your  own  conclusions  as  to  whether  the  "farmers  prefer  exchange 
or  Borden's  prices. 


230  [SENATE 

SAMUEL  LEVY: 

My  business  is  at  45  Forsyth  street.  I  am  in  the  milk  busi- 
ness and  have  been  in  that  business  since  1888.  I  incorporated 
my  business  about  six  months  ago.-  It  is  now  the  Levy  Dairy 
Company.  I  am  president.  The  capital  stock  is  $50,000.  I 
own  about  $40,000  capital  stock.  I  own  some  creameries  and 
rent  some.  I  own  creameries  at  Middleville,  Citterville  and  Ver- 
non,  'New  York.  I  operate  creameries  at  Canastota,  Oneida 
Castle,  Clarkville,  Seths  Corners,  New  York.  Eyra,  Truxton, 
Clayton,  Winthrop,  North  Lawrence,  East  Steuben.  I  sell  milk 
only  in  New  York  city.  I  am  a  wholesaler.  I  own  two  or  three 
shares  of  the  Consolidated  Milk  Exchange.  I  have  never  been  an 
officer  or  director  of  the  exchange.  I  do  not  own  stock  in  Bor- 
den's Condensed  Milk  Company,  Sheffield-Farms-Slosson-Decker 
Company  or  the  Mutual  Milk  and  Cream  Company.  I  never  at- 
tended any  meetings  of  the  Consolidated  Milk  Exchange.  By 
reading  milk  reports  I  found  out  the  value  of  milk  established  by 
the  board  of  directors  of  the  Consolidated  Milk  Exchange.  I  know 
how  to  buy  and  how  to  pay  up  the  farmers.  I  don't  know  who  makes 
the  price  exactly  in  the  "  Milk  Reporter,1'  but  T  know  we  get  the 
"  Milk  Reporter  "  and  we  see  the  prices  and  then  we  think  — 
and  then  I  find  out  what  some  other  people  pays,  and  I  make  the 
prices  that  way.  In  a  good  many  places  you  have  got  to  pay  on 
Borden's  prices  or  more  or  less.  Sometimes  we  make  agreements 
with  farmers  to  pay  them  exchange  prices.  Sometimes  Borden's 
prices.  I  think  it  cost  me  to  handle  milk  from  thirty  to  thirty- 
five  cents  a  can  not  including  freight.  I  manufacture  some  milk 
into  butter  and  cheese.  I  do  not  sell  any  bottled  milk.  I  think 
I  raised  the  price  of  milk  about  ten  cents  a  can  on  November  1st. 
All  of  my  stations  and  freight  zones  are  thirty-two  cents.  Milk 
is  shipped  by  rail.  I  am  a  member  of  the  Milk  Dealers  Protec- 
tive Association.  I  have  never  been  an  officer.  I  think  the 
Standard  Dairy  belongs  there,  and  Mr.  Beakes  belongs  there. 
Mr.  Vedderham  is  the  secretary.  I  pay  dues  of  this  association 
to  George  W.  Blefford,  can  collector.  We  are  taxed  so  much  for 
cans  which  every  member  pays  in  proportion  to  the  amount  of 
business  he  does.  I  do  not  know  of  Blefford  coming  around  in 
the  dead  wagon  or  of  his  trying  to  force  Lieberman  or  Miller  to 


No.  45.]  231 

join  the  association.  I  bring  about  1,200  forty-quart  cans  of 
milk  to  New  York  city  per  day  on  an  average.  If  anybody  goes 
to  my  customers  and  offers  to  sell  them  milk  ten  cents  cheaper,  I 
go  and  sell  them  for  so  much  less  Igive  him  milk,  or  anybody  can 
do  that.  The  collecting  of  cans  takes  up  Blefford's  time  in  fact 
two  more  collecting  wagons  would  have  plenty  of  work  for  two  or 
three  weeks.  Blefford  is  not  a  wholesale  milk  dealer.  I  pur- 
chase from  two  to  three  thousand  milk  cans  per  year.  They  cost 
about  $2.40  or  $2.50  and  in  addition  to  this  I  buy  two  to  three 
thousand  extra  covers,  covers  costing  forty  cents  each.  In  mak- 
ing an  agreement  with  the  producers  for  the  sale  of  milk  with  me 
I  would  say  to  the  farmer  I  got  to  pay  what  the  neighbors  pay ;  in 
some  places  we  have  got  to  pay  Borden's  prices,  if  Borden  is  near 
by,  we  have  got  to  pay  his  prices,  and  the  rest  of  the  places  we 
have  got  to  pay  what  the  neighbors  pay.  I  post  up  the  prices  I 
will  pay  the  farmers  for  milk  in  my  different  creameries.  I  do 
not  have  a  written  contract  with  the  farmers.  Not  all  creameries 
are  owned  by  farmers.  Some  of  them  are  owned  by  railroads, 
that  is  the  railroads  build  the  stations.  The  stations  are  leased 
to  individuals.  This  is  to  stimulate  their  shipping  business.  I 
have  some  stations  that  I  lease  from  the  New  York  Central  and 
the  Lehigh  Valley  Railroads.  The  lease  is  just  a  plain  one.  I 
rent  the  factory  and  pay  the  rent.  There  is  nothing  in  the  lease 
providing  for  the  freight  rate.  It  is  just  thirty-two  cents.  It  is 
a  common  practice  by  railroad  companies.  Half  of  the  farmers 
that  I  do  business  with  base  the  price  upon  the  exchange.  When 
the  exchange  valuation  here  in  New  York  advances,  I  pay  the 
farmer  more,  etc. 

Exhibit  4-C.  received  in  evidence  showing  such  of  his  prices 
which  were  paid  during  the  years  of  1908  and  1909,  is  as  follows: 

1908.  1909. 

Little  Falls,  N.  Y .  $1.194  $1.216 

East  Steuben 1.14  1.177 

Tioga  Centre 1.158  1.199. 

Cedarville 1.15%  1.217 

Oneida  Castle 1.153  1.17% 

Chittenango  Station 1.124  1.186 

Elagtown,  N.  J" 1.18%  ......... 


232  [SENATE 

1908.  1909. 

Ira  Station,  K  Y $1 . 123  $1 . 179 

McAdams  St 1 . 134  1 . 200 

Millers  Mills 1 . 146  1 . 207 

Sheds  Corners "           1.15  1.17 

Trnxton 1 . 144  

Vernon 1 . 145  1 . 196 

Canastota " 1.121  1.20 

Clockville 1.133  1.16% 

Middleville 1 . 204  1 . 201 

Lecla,    eight   months 1.077    8  months  1.394 

South  Bay,  eleven  months 1.169 

Winthron 1 . 242 

Marshville,  six  months ,     1 . 34 

Fort  Lawrence,  five  months 1 . 40% 

My  son-in-law,  William  Levy  represented  my  corporation  at 
the  meetings  of  the  protective  association. 

ISAAC  MAGOON: 

I  reside  in  Addison,  Steuben  county  and  am  engaged  in  the 
shoe  business.  My  farm  is  located  near  Addison  and  is  about 
one  hundred  and  forty-one  acres.  The  figures  that  I  make  my 
statements  from  were  obtained  from  Mr.  Danningberg,  whose 
farm  is  near  mine  and  who  keeps  fifteen  cows  and  sells  his  milk 
to  the  Ilowell  Condensed  Milk  &  Cream  Company.  The  figures 
show  that  there  were  38,950  quarts  of  milk  produced  on  this  farm 
during  1908,  which  cost  $1,220.83.  The  items  going  to  make  up 
the  cost  of  production  are :  Interest  on  capital  invested,  the  cost 
of  labor  and  caring  for  the  dairy,  handling  the  milk  and  the 
feed.  This  was  a  winter  dairy.  It  cost  a  small  fraction  over 
three  cents  to  produce  a  quart  of  milk  throughout  the  year  1908. 
I  would  consider  one-half  cent  a  quart  a  fair  profit.  I  do  not 
know  whether  this  milk  was  sold  at  the  exchange  price  during 
that  year,  but  most  of  the  years  it  has  been.  I  have  understood 
that  the  committee  of  the  New  York  Milk  Exchange  was  com- 
posed of  some  men  in  ~New  York  who  met  when  they  thought 
there  was  too  much  milk  coming  and  lowered  the  price  and  ii 
they  wanted  more  milk,  they  raised  the  price  a  little  and  coaxed 


No.  45.]  233 

out  a  little  more.  This  is  my  impression  of  the  Consolidated 
Milk  Exchange  before  this  inquiry  began.  I  have  known  of  this 
exchange  price  and  of  the  manner  of  fixing  it  for  years  —  sold 
milk  at  that  station  for  ten  or  twelve  years  and  the  majority 
of  the  farmers  sell  their  milk  at  this  station  also.  'Some  became 
dissatisfied  and  now  sell  their  milk  to  butter  and  cheese  factories. 
With  the  exception,  as  I  have  said,  of  the  Cuba  cheese  price,  all 
milk  sold  as  fluid  milk  going  to  New  York  is  sold  at  exchange 
prices  to  the  Howell  Condensed  Milk  Company.  The  farmer 
was  compelled  to  take  the  exchange  price  if  he  wanted  to  sell  his 
milk.  He  had  no  option.  The  only  other  way  he  can  do1  is  to 
ship  his  cream  to  a  butter  factory  in  Pennsylvania  or  to  some 
cheese  factory.  There  is  no  way  to  market  the  fluid  milk.  I 
would  state,  that  in  my  opinion,  the  farmer  is  absolutely  bound  to 
take  the  exchange  price,  no  matter  what  price  they  establish.  For 
several  years,  they  have  not  asked  us  to  sign  contracts.  I  wish 
to  state  in  regard  to  the  exchange  price,  that  we  got  for  our  milk 
when  it  was  sold  less  twenty  cents  a  can  for  handling  the  milk, 
station  price  at  the  freight  is  usually  six  cents  a  can,  ferriage 
charges  from  Jersey  City  to  New  York.  The  farmers  received 
exchange  price  less  this  ferriage.  They  gave  us  to  understand 
that  the  ferriage  includes  the  cost  of  trucking  the  milk  from  the 
platform  to  the  store  in  the  city,  of  the  dealer  who  was  to  sell 
it. 

REFEKEE : 

Q.  Then  it  was  six  cents  for  freightage  ?    A.  Yes,  sir. 

Q.  Or  cartage?    A.  Yes,  sir. 

We  took  the  paper  that  gave  the  exchange  prices.  As  I  re- 
member, the  old  contract  was  that  we  were  to  deliver  milk  in 
such  a  degree  of  temperature,  cooled  down  to  such  a  degree,  and 
furnish  them  all  the  milk  that  was  produced,  except  for  the  family 
use,  on  the  farm  during  the  year,  at  exchange  prices.  I  have 
some  figures  that  show  the  prices  obtained  at  this  creamery  for 
milk,  during  the  various  months  of  the  years  1907,  1908  and 
1909.  Commencing  January,  1907,  price  obtained  was  $1.35  per 
forty-quart  can.  February,  $1.25;  March,  $1.10;  April,  $1.10; 
May  1st  to  15th,  $1;  May  15th  to  balance  of  month,  90  cents; 


234  ['S'ENATE 

June,  80  cents;  July  1st  to  15th,  80  cents;  balance  of  month, 
97  cents;  August  1st  to  llth,  $1;  August  llth  to  21st,  $1.10; 
August  21st  to  August  31st,  $1.20;  September,  $1.20;  October, 
$1.44%;  November,  $1.44%;  December,  $1.44%.  1908,  Janu- 
ary, $1,40;  February,  $1.30;  March,  $1.20;  April,  1st  to  16th, 
$1.06;  April  16th  to  end  of  month,  $1;  May  1st  to  16th,  90 
cents;  balance  of  month,  80  cents;  June  1st  to  5th,  801  cents; 
balance  of  month,  70  cents ;  July,  80  cents ;  August,  $1 ;  Sep- 
tember, $1.05;  October,  $1.30;  November,  $1.35;  December, 
$1.40.  1909,  January,  $1.35;  February,  $1.25;  March,  $1.20; 
April,  $1.05;  May,  85  cents;  June,  70  cents;  July,  93  cents; 
August,  $1,12;  September,  $1.27%;  October,  $1.35;  November 
1st  to  25th,  $1.45;  balance  of  month,  $1.50;  December,  $1.50. 
That  is  the  actual  price  I  received  in  money  for  those  three  years. 
I  understand  that  a  combination  exists  among  the  dealers  in  New 
York  city,  composed  of  a  few  members  that  met  regularly  to  make 
this  price,  and  that  is  the  price  that  farmers  in  my  locality  had 
to  accept.  They  have  no  other  remedy  except  selling  to  cheese 
factories,  as  I  have  before  stated.  I  think  the  exchange  is  very 
detrimental,  as  they  only  pay  a  large  enough  price  to  keep  it 
from  going  into  the  butter  and  cheese  factories.  The  exchange 
makes  the  price  so  low  it  is  unprofitable  for  the  farmers  to  sell 
their  milk  to  them  and  they  obtain  so  much  milk  that  they  can 
keep  a  surplus  and  they  can  limit  the  price  for  that  reason.  They 
get  milk  from  a  very  extensive  territory,  even  farther  west  than  I 
am,  and  I  am  301  miles  west  of  New  York.  There  is  127  acres 
in  my  farm,  worth  about  $35  an  acre,  and  fifteen  cows,  at  about 
$50  a  head.  We  are  not  guided  by  Borden's  prices  in  my  com- 
munity. Their  nearest  plant  is  at  Wellsboro,  Pennsylvania.  The 
cheese  factory  that  I  spoke  of  is  run  on  the  basis  of  the  cheese 
market.  They  charge  the  farmer  so  much  for  making  the  cheese, 
that  is  the  way  the  cheese  business  is  run;  they  don't  pay  the 
money  right  down.  They  manufacture  the  milk  into  cheese  and 
then  sell  the  cheese  and  give  the  farmer  the  benefit  of  whatever 
price  they  can  get.  The  farmers  are  inclined  to  think  it  is  a  little 
more  profitable  for  the  last  year  or  two  in  the  summer  season. 
This  cheese  factory  is  run  during  the  summer  only. 


Xo.  4;",.]  235 

EDGAR  L.  MARSTEN  : 

I  reside  at  23  East  Fifty-seventh  street,  New  York  city.  I 
have  been  a  director  of  the  Borden's  Condensed  Milk  Company 
since  1902.  I  have  never  been  a  officer.  I  attended  directors' 
meetings  held  in  the  company's  office.  I  am  a  member  of  the 
firm  of  Blair  &  Company.  I  had  no  conversation  about  the 
necessity  of  raising  the  price  of  milk  (bottled)  previous  to  No- 
vember first.  I  have  nothing  to  do  with  the  milk  business,  simply 
attended  the  meetings.  I  think  I  know  Mr.  W.  B.  Conklin  of 
the  Consolidated  Milk  Exchange.  The  executive  committee  so 
far  as  I  know  raised  the  price  of  milk  without  consulting  the 
board  of  directors,  the  only  reason  being  given,  Mr.  Rogers  said, 
was  the  fact  that  he  had  figured  out  that  the  delivery  of  each 
'bottle  of  milk  in  New  York  meant  a  loss  to  the  company.  He 
figured  its  cost  of  eight  and  eighteen  one  thousandths  cents  per 
bottle.  That  was  for  the  month  of  October  and  each  succeeding 
month  would  mean  an  increased  loss. 

ALBERT  J.  MILBANK: 

I  am  a  director  of  Borden's  Condensed  Milk  Company.  Have 
been  about  fourteen  or  fifteen  years.  I  was  formerly  the  treas- 
urer. I  think  it  was  1889  until  1903.  I  reside  at  42  West 
Thirty-eighth  street.  I  don't  take  any  active  interest  in  the  man- 
agement of  Borden's  Condensed  Milk  Company.  Merely  attend 
the  meetings  of  the  board  of  directors.  The  only  discussion  I 
heard  prior  to  November  1,  1909,.  in  reference  to  the  necessity  or 
advisability  of  raising  the  price  of  bottled  milk  was  from  the  fact 
of  the  high  price  the  milk  was  costing  us  it  would  be  necessary 
to  do  it.  These  talks  were  had  in  the  company's  meetings,  Said 
it  would  be  inevitable.  That's  all  the  general  talk.  I  never 
talked  with  any  one  in  reference  to  the  advisability  of  raising  the 
price  outside  of  those  meetings.  Never  heard  of  any  agreement 
existing  among  members  of  the  different  companies  in  reference 
to  it.  The  board  of  directors  don't  take  any  part  in  fixing  the 
price  of  milk  paid  to  producers.  I  have  no  recollection  of  any 
discussion  in  reference  to  a  campaign  of  education  to  educate 
the  people  to  pay  a  higher  price  for  milk.  I  .don't  know  any 


236  [SENATE 

officers  or  directors  of  the  Sheffield  Farms  Slawson-Decker  Com- 
pany. I  have  quite  a.  number  of  shares  in  Borden's.  I  don't 
know  of  anything  else  that  I  could  add  to  my  testimony. 

DUNLEVY  MILBA^K: 

I  reside  at  Greenwich,  Connecticut.  I  am  a  director  of  the 
Borden's  Condensed  Milk  Company.  I  have  been,  since  the  an- 
nual election  in  1>902.  I  attended  the  directors'  meetings  regu- 
larly. I  attended  one  during  October,  1909.  I  understood  at 
that  meeting  that  the  price  of  milk  would  have  to  be  raised.  I 
do  not  remember  the  discussion  at  the  meeting.  I  know  that  the 
price  of  milk  at  the  creamery  end  had  gone  up  so  there  was  not 
very  much  profit  in  it  and  the  price  of  delivery  in  New  York  was 
about  eight  and  a  fifth  cents.  I  never  had  a  discussion  with 
anyone  previous  to  November  1,  1909,  in  reference  to  the  neces- 
sity or  advisability  of  raising  the  price  of  bottled  milk  to  the 
consumer.  I  take  no  part  in  the  management  or  operation  of  the 
Borden  Company.  I  know  Mr.  Millet  of  the  Mutual  Company 
and  I  think  I  have  met  Webb  Harrison  of  the  Consolidated  Milk 
Exchange  but  I  have  not  seen  him  since  1900.  I  never  spoke 
to  any  of  the  men  mentioned  in  the  list  of  the  consolidated  in 
reference  to  the  price  of  milk.  I  never  heard  of  any  agreement 
among  the  milk  dealers  in  New  York  city  to  raise  the  price  of 
milk  on  November  1,  1909,  from  eight  to  nine  cents. 

ARTHUR  W.  MILBUBN: 

I  reside  at  Haverstraw.  I  am  assistant  treasurer  of  Borden's 
Condensed  Milk  Company.  "  In  accordance  with  the  direction  of 
the  Deputy  Attorney-General  that  Mr.  Milburn,  Assistant  Treas- 
urer of  Borden's  Condensed  Milk  Company  should  criticise  and 
discuss  the  testimony  given  by  Mr.  Scudder  covering  the  accounts 
of  the  Borden  company,  the  following  is  respectfully  submitted. 

While  the  clerical  accuracy  of  Mr.  Scud der's  figures  is  not  dis- 
puted the  inferences  and  deductions  apparently  to  be  derived 
therefrom  are  erroneous  and  manifestly  unjust  to  the  Borden 
company. 

First.  The  business  of  the  Borden  company  is  divided  into 
two  separate  and  distinct  branches,  viz.,  the  Manufacturing  de- 
partment and  the  Route  (or  so-called  "  Fluid  Milk ")  depart- 


Xo.  4-5.]  237 

ment.  The  former  covers  our  trade  in  the  manufactured  pro- 
ducts, of  condensed  milk,  evaporated  milk,  condensed,  coffee 
malted  milk,  milk  chocolate  and  caramels.  We  have  thirty-one 
plants  devoted  to  this  branch  of  our  business  in  eight  different 
states  and  our  said  manufactured  products  are  sold  in  every  part 
of  the  United  States  and  practically  all  over  the  world.  The  ac- 
counts of  the  two  departments  are  kept  separate  and  the  accounts 
of  the  Route  department  cover,  and  always  have  covered,  the 
entire  business  of  that  department  with  differentiation  in  final 
results  either  as  to  territory  or  product. 

As  to  territory  the  business  of  the  Route  department  covers  not 
only  the  cities  of  Chicago  and  New  York  but  a  large  territory 
in  Xew  Jersey,  a  considerable  portion  of  Westchester  county  out- 
side of  Xew  York  and  several  adjoining  towns  in  Connecticut; 
and  in  the  country  districts  the  cost  of  delivery  is  considerably 
less,  and  the  profits  correspondingly  greater,  than  in  the  city  dis- 
tricts. As  to  products  the  Route  department  covers  not  only  fluid 
milk  and  cream  but  buttermilk  and  the  manufactured  products 
of  casein,  cheese,  butter  and  unsweetened  condensed  milk  sold  to 
consumers  from  our  wagons. 

Second.  The  accounts  of  the  Route  department  cover,  as 
stated,  the  business  of  the  department,  as  an  entirety  and  it  is 
absolutely  impossible  to  accurately  determine  from  the  company's 
books  what  proportion  of  the  total  Route  department  profits  is  the 
result  of  the  purely  fluid  milk  business  in  Xew  York  city  alone. 
The  method  used  by  Mr.  Scudder  in  determining  such  profit  was 
to  credit  the  fluid  milk  sold  in  Xew  York  with  such  a  percentage 
of  the  total  Route  department  profits  (from  all  sources  and  de- 
rived from  the  entire  enormous  territory  covered)  as  the  total 
milk  bottled  in  the  East  bears  to  the  total  milk  used  by  the  Route 
department  in  the  East.  This  is  a  pure  approximation,  and  as 
determining  the  profit  on  fluid  milk  sold  in  Xew  York  city,  is 
unfair  as  it  assumes  that  the  margin  of  profit  on  each  100  pounds 
of  milk  used  is  the  same  no  matter  what  disposition  is  made  of 
it  and  as  it  wholly  fails  to  take  into  consideration  the  various 
other  items  bearing  on  the  Route  department  business;  such  as, 
for  instance,  the  greater  cost  of  delivery  in  Xew  York,  the  greater 
cost  of  stabling,  taxes,  interest  on  the  cost  of  expensive  city  sta- 
tions and  the  like. 


238  [SEX ATE 

Third.  In  none  of  Mr.  Scudder's  figures  as  to  profits  has  any 
allowance  been  made  for  interest  on  cost  of  investment  in  bottling 
plans  and  stations,  depreciation,  bad  debts,  accident  costs  and 
insurance  costs,  with  the  sole  exception  of  insurance  costs  which 
were  a  charge  up  to  July  1,  1908,  but  not  since.  Were  these 
(excluding  interest)  charged  against  the  fluid  milk  business  in 
New  York  alone,  using  the  same  percentage  above  referred  to, 
it  would  reduce  the  total  figures  about  $55,000  for  the  year  ending- 
June  30,  1908,  and  about  $75,000  for  the  year  ending  June  30, 
1909. 

Fourth.  The  statement  as  to  the  net  profit  "  on  fluid  milk  and 
cream,  New  York  and  Chicago  "  for  the  nine  months  ending  Sep- 
tember 30,  1909,  amounting  to  $1,076,772.15  which  covers  both 
the  East  and  the  West  is  also  manifestly  unfair.  It  selects  the 
months  of  the  year  of  the  greatest  profit,  and  ignores  the  three 
months  (October,  November  and  December)  when  the  profit  is, 
and  always  has  been,  even  under  the  most  favorable  conditions, 
at  a  low  ebb  and,  as  far  as  1909  is  concerned,  it  is  especially 
misleading  as  since  September  30,  1909,  the  prices  paid  the 
farmers  for  milk  have  been  greater  than  has  ever  been  paid  be- 
fore in  the  history  of  the  company  and  the  freight  rates  to  New 
York  have  been  increased  eight  per  cent. 

Fifth.  Owing  to  the  increasing  distances  from  which  fluid 
milk  must  be  transported  to  the  city  with  consequent  increasing 
freight  charges  and  to  the  facts  that  the  Borden  company  does 
its  bottling  at  its  plants  in  the  country  and  not  in  the  city  with 
consequently  increased  cost  of  outlay  in  handling  and  other  re- 
spects, that  it  makes  twice  a  year  six  months  contracts  with  the 
farmers  by  which  it  is  obligated  for  that  entire  period  notwith- 
standing the  conditions  of  the  consuming  market  and  notwith- 
standing lower  prices  paid  by  concerns  which  only  buy  from  hand 
to  mouth  and  that  it  spares  no  expense  to  keep  its  milk  up  to  its 
.standard  both  in  respect  of  its  inspection  of  dairies  and  in  the 
condition  of  its  own  plants,  the  delivery  of  milk  in  New  York 
eity  for  this  company  is  an  expensive  proposition.  Every  quart 
of  bottled  milk  delivered  by  the  Borden  company  to  the  New 
York  consumer  during  the  month  of  October,  1909,  for  eis;ht 
-cents  actually  cost  the  company  8  187/1000  cents.  During  the 


No.  45.]  239 

months  of  November  and  December,  when  the  price  was  nine 
cents,  the  respective  actual  costs  were  8  633/1000'  cents  and 
8  826/1000  cents  and  a  careful  estimate  places  the  delivery  cost 
for  the  months  of  January,  February  and  March,  1910,  at 
8  850/1000,  8  743/1000  and  8  11/100  respectively. 

The  cost  naturally  decreases  in  the  spring  and  summer  when 
the  cost  of  milk,  owing  to  open  pasturage  and  the  cost  of  de- 
livery, owing  to  absence  of  snow  and  winter  storms,  are  less. 

Sixth.  Mr.  Scudder  gives  the  profits  "  on  fluid  milk  alone  in 
New  York  alone,  for  the  year  ending  June  30,  1909,  at 
$496,976. 36."  Even  assuming  the  correctness  of  Mr.  'Scudder's 
basis  of  arriving  at  the  profits,  this  is  1  73/100  per  cent,  on  the 
entire  present  outstanding  capital  stock  of  the  company,  it  is 
1  98/100  per  cent,  on  the  present  actual  tangible  assets  of  the 
company,  it  is  a  profit  of  but  four  and  one-tenth  mills1  per  quart, 
and  a  percentage  of  profits  on  the  entire  gross  sales  of  fluid  milk 
during  that  year  of  but  5  2/10  per  cent,  and,  if  the  $75,000 
for  additional  expenses  above  referred  to  be  taken  into  considera- 
tion, this  5  2/10  per  cent,  would  be  reduced  to  4  4/10  per  cent. 

If  the  Borden  company  had  for  the  year  ending  June  30,  190'9, 
sold  for  an  average  profit  of  one  cent  per  quart  all  its  "  fluid 
milk  alone,  New  York  alone,"  its  profit,  instead  of  being 
$496,976.36,  as  figured  by  Mr.  Scudder,  would  have  been  on  the 
same  basis  $1,202,233.14.  If  it  had  for  the  year  ending  June 
30,  1909,  sold  for  an  average  profit  of  one  cent  per  quart  all  its 
"  fluid  milk  and  cream,  New  York  and  Chicago  "  its  profit,  in- 
stead of  being  $793,6>22.0'5,  as  figured  by  Mr.  Scudder,  would 
have  been  $2,130,214.7'5. 

While  in  dollars  and  cents  the  profit  may  seem  large,  it  should 
be  judged  in  view  of  the  magnitude  of  the  Borden  business  and 
the  figures  given  above  show  not  a  reasonable,  but  an  inadequate 
return  whether  based  on  sales  or  on  any  other  basis  by  which 
what  is  a  fair  and  legitimate  profit  is  determined  in  any  other 
business  and  especially  in  a  business  dealing,  with  all  its  obvious 
risks,  in  a  perishable  product. 

Seventh.  Mr.  Scudder  in  stating  the  total  net  profits  of  the 
company  for  the  year  ending  September  30,  1909,  made  an  error 
bv  concluding;  that  in  a  certain  account  a  six-months'  period  was 


240  [-SEXATE 

a  three-months'  period.  As  I  and  our  accountants  figure,  the 
total  net  profits  as  given  by  him  should  be  reduced  by 
$128,149.92,  making  the  total  net  profits,  $2,488,87-9.48.  The 
great  hulk  of  this  profit  comes  from  our  Manufacturing  Depart- 
ment. Taking  Mr.  Scuddier's  profit  on  "  fluid  milk  alone,  \cw 
York  alone "  for  the  year  ending  June  30,  1909  (viz., 
$496,976.36),  it  is  but  22  63/100  per  cent,  of  our  total  profit 
from  all  sources. 

Eighth.  The  actual  tangible  assets  of  the  company  (exclusive 
of  all  good  will,  patents  and  trade  marks)  amount,  by  actual 
book  value,  to  $25,134,442.96.  The  total  net  profits  as  given  by 
Mr.  Scudder  for  the  year  ending  September  30,  1909,  loss  the 
error  of  $128,149.92  above  referred  to,  represents  a  profit  of  9.90 
per  cent,  on  the  gross  tangible  HSM-IS  and  S.U7  per  cent,  on  the 
entire  outstanding  capital  stock.  As  has  been  said,  the  great 
bulk  of  this  profit  comes  from  our  Manufacturing  Department 
and  it  cannot  be  disputed  that  a  manufacturing  company  is  fairly 
entitled  to  earn  at  least  a  minimum  of  10  peir  cent,  on  the  value 
of  its  actual  assets  or,  in  other  words,  on  the  amount  it  actually 
has  invested  in  its  business. 

Ninth.  It  does  not  sc<  m  necessary,  as  germane  to  this  inves- 
tigation, to  discuss  the  question  of  the  company's  good  will,  but 
so  long  as  it  was  referred  to  in  Mr.  Srudder's  testimony  some 
facts  regarding  it  may  be  of  importance.  If  Mr.  Scudder,  in 
using  the  term  "balancing  entry,"  meant  to  imply  that  no  con- 
sideration was  given  to  the  question  of  the  value  of  the  company's 
good  will  at  the  time  of  the  incorporation  of  the  present  com- 
pany in  1899,  he  is  wholly  in  error.  The  business  of  the  Borden 
company  was  established  in  1857,  over  fifty  years  ago.  It  was 
the  pioneer  in  the  condensed  milk  business.  It  was  the  pioneer 
in  the  present  scientific  methods  of  producing  and  handling  fluid 
milk.  It  sells  its  products  in  every  state  in  the  Union  and  prac- 
tically over  the  entire  world.  It  owns  numberless  brands  and 
trade  marks  appertaining  to  its  manufactured  product,  many  of 
them  registered  in  foreign  countries.  It  owns  many  patents  and 
processes  and  formulas  of  great  value.  It  has  the  accumulation, 
in  its  records,  its  literature,  its  knowledge  of  the  trade  throughout 
the  world,  its  relation  to  the  farmer,  its  organization,  of  over  fifty 


Eo.  45.]  241 

years  of  successful  business.  Every  court,  whether  State  or  Fed- 
eral, has  repeatedly  held  that  good  will  is  property  and  a  proper 
subject  for  stock  issue.  To  say  that  such  a  good  will  as>  the 
Bordexi  company  has  is  water,  or  was  valued  merely  as  a  balanc- 
ing entry,  would  hardly  seem  to  state  the  case  fairly, 

.Furthermore,  the  entire  outstanding  capital  stock  of  the  com- 
pany is  $28,692,200,  and  deducting  the  actual  tangible  assets  of 
$25,1 34,442.9*6  leaves  $3,557,757.0(4.  As  a  matter  of  fact,  there- 
fore, the  excess  of  the  par  value  of  the  outstanding  stock  over 
actual  tangible  assets,  or  the  amount  of  stock  represented  by  good 
will,  patents  and  trade  marks,  is  but  $3,557,757.04. 

Tenth.  The  increase  in  tangible  assets  since  1899  is  owing  to 
the  wholly  inadequate  value  then  placed  upon  them,  to  the  build- 
ing of  new  plants  and  to  the  sale  of  increased  issues  of  stock ;  and 
in  every  case  such  sale  for  cash  required  to  provide  for  the  in- 
creasing needs  and  expansion  of  the  business. 

Eleventh.  The  increases  of  1909  over  1908  as  shown  by  Mr. 
Scudder  were  caused  largely  by  the  decreased  cost  of  milk  and  the 
increase  in  the  volume  of  business;  such  increase  being  caused 
partly  by  the  normal  and  regular  increase  and  partly  by  the  in- 
crease owing  to  the  improved  financial  conditions  in  1909  over 
1908,  especially  over  the  first  six  months  of  that  year.  It  is 
hardly  appreciated  what  a  falling  off  there  is  in  consumption, 
especially  in  cream,  during  a  period  of  financial  depression. " 

Twelfth.  Without  repeating  what  has  been  said  above,  the  posi- 
tion of  the  Borden  Company  is  that,  as  far  as  it  is  concerned,  it 
cannot,  under  conditions  as  they  are  to-day,  sell  milk  in  the  city 
of  New  York,  and  maintain  its  present  standard  of  excellence,  at 
an  all-year  price  of  eight  cents  and  at  the  same  time  make  a  profit 
which,  to  any  fair-minded  person  or  on  any  basis,  would  be  at  all 
adequate,  legitimate  or  reasonable.  Even  by  increasing  to  nine 
cents  during  the  winter  months,  the  company  does  not  consider 
.that  the  profit  per  quart  or  the  profit  on  gross  sales,  as  shown  by 
the  figures  above  given,  would  come  within  that  depreciation.  If 
by  its  ability,  organization  and  economies  the  company  is  able  to 
do  a  large  volume  of  business  at  a  very  small  profit  it  does  not  see 
any  reasonable  ground  of  criticism  because,  by  reason  of  such 
large  volume,  the  very  small  percentage  of  profit  may  in  the  aggre- 
gate amount  to  a  large  sum." 


242  [SENATE 

In  our  Eoute  Department  we  sell  fluid  milk,  cream,  unsweet- 
ened, condensed  milk,  butter,  buttermilk,  cheese,  casein. 

(See  Exhibit  6-A  and  6-B.) 

At  the  time  that  our  Board  acted  on  that  question,  they  had 
already  been  advised  of  the  fact  that  milk  sold  in  October  at  eight 
cents  meant  a  loss  of  about  one-fifth  of  a  cent,  and  that  November 
and  December  and  the  following  months  would  mean  consider- 
ably more  of  a  loss  at  eight  cents ;  they  knew  that  the  period  from 
October  1st  to  April  1st  always  was  an  exceedingly  lean  period; 
and  they  knew,  that  we  had  contracted  for  the  delivery  of  milk 
from  the  farmers  during  that  period  of  six  months  at  a  price  that 
was  the  highest  ever  paid  in  the  history  of  the  company;  and  it 
was  all  those  facts  taken  into  consideration  that  brought  about  the 
raise  in  the  price  of  milk,  and  nothing  else.  Our  bottled  milk 
has  been  sold  at  eight  cents  without  interruption  from  1887  to 
1907.  iSometime  in  November  of  that  year  it  was  made  nine 
cents.  It  continued  until  March  2d  at  nine  cents,  and  despite  the 
fact  that  we  got  nine  cents  for  our  milk  during  that  period,  esti- 
mated on  the  same  basis  as  Mr.  Scudder's  figures,  it  would  show 
a  loss  in  bottled  milk.  I  have  been  assuming  in  answering  "  Yes  " 
to  these  questions  as  asked  by  you,  that  they  corresponded  with 
records  .as  found ;  but,  of  course,  none  of  them  include  any  charge 
for  depreciation,  or  accident  cost,  or  insurance  cost,  except  as 
noted,  or  bad  debts,  or  interest  on  investment.  In  the  case  of  bad 
debts  and  accidents,  they  become  a  charge  against  what  we  call 
our  "  Guarantee  Fund,'7  and  insurance  costs  become  a  charge 
against  our  Insurance  Fund,  and  depreciation  against  Deprecia- 
tion Fund.  Provision  is  made  from  the  earnings  of  the  company 
for  those  funds. 

On  June  30,  1909,  the  total  capital  stock  of  the  company  was 
$25,000,000,  of  which  there  was  issued  for  trade  mark,  patent  and 
good  will,  $15,42 8,40-8. 46.  The  company  was  organized  with  a. 
capitalization  of  $20,000,000.  Of  that  amount  $4,070,591.54  was 
paid  for  the  assets  of  the  New  York  Condensed  Milk  Co.  I  paid 
for  20,000  shares  of  the  capital  stock  of  Borden's  Condensed  Milk 
Co.  at  $25  per  share.  The  New  York  Condensed  Milk  Com- 
pany's capitalization  is  $3,000,000. 


Xo.  45.]  243 

(At  the  conclusion  of  the  examination  of  this  witness,  Mr.  Mar- 
shall produced  the  following  statement  which  was  read  into  the 
minutes.) 

"  ~No  onejs  more  concerned  than  the  Borden  Company  in  keep- 
ing down  the  price  of  milk  to  the  consumer  and  in  making  the  pro- 
duction of  milk  profitable  to  the  farmer.  This  company's  profits 
depend  upon  the  volume  of  its  business.  To  increase  the  retail 
price  cuts  down  the  consumption  and  diminishes  the  volume. 
Also  if  the  production  of  milk  is  unprofitable  to  the  farmer,  he 
ceases  dairying.  This  compels  the  Borden.  Company  to  go  fur- 
ther for  its  milk  supply  and  to  pay  more  for  freight,  icing  and 
additional  stations. 

The  Borden  Company  has  no  connection  of  any  kind,  direct  or 
indirect,  with  the  Consolidated  Milk  Exchange.  Neither  is  it 
now  or  ever  has  been  a  party  to  any  combination  or  agreement  for 
the  purpose  of  fixing  the  price  of  milk. 

The  business  of  this  company,  which  originally  was  the  manu- 
facture of  condensed  milk,  was  founded  in  1857,  fifty-three  years 
ago,  upon  the  patents  of  the  inventor,  Gail  Borden. 

In  manufacturing  condensed  milk,  it  was  soon  discovered  that 
it  was  absolutely  essential  to  obtain,  a  high  grade  of  sanitary  milk 
to  insure  keeping  quality.  It  thus  became  necessary  to  originate 
and  enforce  rules  and  regulations  under  which  farmers  supply- 
ing milk  by  contract  would  produce  clean,  pure  milk,  under  the 
most  sanitary  conditions.  In  1887  the  company  began  the  bottling 
of  fluid  milk  in  the  country  for  sale  direct  to  the  consumer  in  the 
city.  Milk  bottled  in  the  country  where  it  is  produced  under  strict 
sanitary  supervision  and  delivered  to  consumers  under  original 
seal,  containing  all  the  constituents  of  the  milk  as  taken  from  the 
cow,  stands  in  a  class  by  itself,  both  as  to  quality  and  freedom 
from  germ  contact. 

The  freight  rate  on  bottled  milk,  such  as  the  Borden  Company 
furnishes,  is  much  higher  than  on  milk  shipped  in  bulk  or  in 
forty-quart  cans,  and  again  there  is  a  high  extra  expense  involved 
both  in  the  labor  of  handling  bottled  milk  and  the  loss  and  break- 
age of  bottles,  and  the  heavy  costs  for  icing  to  insure  against  bac- 
terial development. 

During  the  twenty  years,  from   1887   to   1907,  the  company 


244  [SENATE 

charged  the  consumer  a  uniform  price  of  eight  cents  per  quart. 
In  the  meantime  it  gradually  raised  the  price  paid  to  the  farmer. 
When  the  increased  price  paid  by  this  company  to  the  farmer  had 
risen  40  per  cent,  the  Borden  Company,  on  November  18th,  1907, 
raised  the  price  to  the  city  consumer  to  nine  cents  per  quart, 
lowering  the  price  again  to  eight  cents  in  the  spring  of  1908,  at 
which  time  the  price  to  the  farmer  was  also  reduced.  Again  on 
October  1,  1909,  the  price  paid  to  the  farmer  was  increased  for 
the  period  covered  by  the  winter  contract  to  the  highest  price  ever 
paid  to  him,  and  the  Borden  Company,  on  November  1st,  in- 
creased the  retail  price  of  milk  1  per  cent  per  quart. 

Had  this  company  continued  to  charge  the  consumer  eight 
cents,  being  obliged  to  pay  the  farmer  the  high  price  covered  by 
the  winter  contract,  it  would  have  sustained  an  actual  loss  on  its 
bottled  milk  business  in  the  Metropolitan  district  in  the  month  of 
November,  a  still  greater  loss  in  December  and  for  the  balance  of 
the  contract  period. 

During  the  years  this  company  continued  its  uniform  price 
of  eight  cents  for  milk  to  the  consumer,  the  price  of  feed  increased 
to  the  farmers  as  follows:  Bran,  79.54  per  cent.;  middlings, 
62.58  per  cent. ;  oil  meal,  37.33  per  cent. ;  corn,  103.82  per  cent, 
tmd  oats,  73.26  per  cent.  The  Borden  Company  increased  the 
price  to  the  farmer  for  milk,  42  per  cent.  The  railroads  in- 
creased their  freight  charges  to  the  Borden  Company  23  per  cent, 
and  the  Borden  Company  paid  increases  of  20  per  cent,  to  25  per 
cent,  in  wages.  Yet  the  company  during  this  time  has  met  all  the 
increase  in  cost  of  milk,  transportation  and  labor,  owing  to  the 
volume  of  business,  without  increasing  the  charge  to  the  public, 
for  a  specialized  quality  of  bottled  milk  with  the  exception  of  the 
winter  months  of  1907  and  1908 ;  and  the  present  period  since 
November  of  1909.  The  increase  in  the  price  of  milk  from  eight 
cents  to  nine  cents  represents  12-J  per  cent,  or  less  than  one-third 
the  percentage  increase  in  other  food  products. 

The  price  of  milk  to  the  farmer  is  governed  by  the  wholesale 
price  of  butter  and  cheese.  To  secure  superior  milk  with  the  at- 
tention paid  to  the  Borden  sanitary  rules,  this  company  must  pay 
a  considerably  higher  price  than  a  butter,  creamery  or  cheese 
factorv. 


Xo.  45.]  245 

The  wholesale  price  of  butter  has  increased  63  per  cent,  the 
wholesale  price  of  cheese  73  per  cent.  The  retail  price  of  butter 
and  cheese  has  correspondingly  increased.  This  is  greatly  due  to 
the  fact  that  butter  and  cheese  go  through  many  hands,  by  the 
Borden  method  goes  direct  from  the  producer  to  the  consumer 
with  only  one  profit.  Mr.  Marvyn  Scudder,  accountant  to  the 
Attorney-General  states  that  profit  to  be  5.2  per  cent.,  not  allow- 
ing for  depreciation,  bad  debts  and  accidents  or  less  than  one-half 
cent  a  quart.  Compare  that  half-cent  with  the  commission-man's, 
wholesaler's,  jobber's  and  retailer's  profits  on  a  pound  of  butter  or 
cheese  or.  a  dozen  of  eggs. 

Realizing  that  the  increased  cost  of  bran,  oil  meal,  oats,  corn 
and  other  milk  feeds  diminished  the  farmer's  profits,  the  Borden 
Company  is  arranging  to  co-operate  with  the  farmers  in  assisting 
them  to  secure  cows  of  greater  productive  capacity,  with  pure 
alfalfa  seed  and  instruction  in  the  raising  of  alfalfa  and  root 
crops  and  in  other  ways  to  diminish  the  farmer's  feed  bill  and 
increase  his  profits.  The  average  cow  produces  less  than  3,000 
quarts  of  milk  per  year.  To  increase  this  production  by  better 
breeding  to  4,000  quarts  is  a  moderate  expectation.  To  substi- 
tute home-raised  feed  for  purchased  feed  would  make  additional 
profits  to  the  farmer.  Either  the  production  of  milk  must  be 
more  profitable  to  the  farmer  or  the  supply  will  continue  to  di- 
minish. 

Records  of  this  company  show  that  the  average  daily  produc- 
tion of  milk  per  dairy  has  fallen  from  141  quarts  to  109  quarts. 
Every  such  decrease  necessitates  the  Borden  Company  going 
further  afield  for  milk, this  increasing  the  costs  of  transportation 
and  icing,  as  well  as  the  cost  of  receiving  stations.  It  is  of  vital 
importance  to  the  Borden  Company  to  find  some  solution  of  how 
to  increase  the  farmers'  profits,  and  prevent  a  further  tendency 
of  the  dairyman  to  go.  out  of  a  business  which  he  considers  no 
longer  a  profit  maker.  The  Borden  Company  knows  that  after 
paying  the  highest  price  ever  paid  by  anybody  to  the  farmer,  that 
Borden's  bottled  milk  laid  down  on  the  Xew  York  doorsteps  costs 
the  Borden  Company  to-day  almost  nine  cents  per  quart  without 
any  charge  for  depreciation,  bad  debts,  accidents,  insurance,  or 
allowance  for  cash  invested  in  plants. 


246  [SENATE 

There  are  four  parties  interested  in  the  milk  business ;  the  pro- 
ducer, the  transporter,  the  distributor  and  the  consumer.  Of  these 
four,  the  consumer  has  borne  the  least  share  of  the  general  in- 
crease. The  retail  price  of  other  food  products  —  meat,  butter, 
eggs,  lard,  cheese  and  flour  —  has  increased  on  an  average  of  over 
40  per  cent.  The  best  and  most  wholesome  milk  —  the  kind  that 
the  Borden  Company  sells  —  has  increased  only  124-  per  cent. 
That  this  increase  is  comparatively  so  slight  is  due  to  economies, 
the  direct  handling,  and  the  efficient  organization  of  the  Borden 
Company,  and  to  its  policy  of  small  profits  and  a  large  volume  of 
business. 

An  examination  of  the  statistics  will  show  that  the  territory 
supplied  by  the  Borden  company  received  a  far  greater  percentage 
of  safe,  sanitary  milk,  at  a  lower  price,  than  any  other  cities  in 
the  United  States." 

BOEDER'S  CONDENSED  MILK  CO. 
WM.  J.  ROGEKS, 

President" 
STEPHEN  C.  MILLETT: 

I  reside  at  Irvington  on  the  Hudson.  I  am  at  present  a  di- 
rector of  the  Mutual  Milk  &  Cream  Company,  and  have  been 
since  the  spring  of  1907.  I  have  never  been  an  officer  of  the 
company.  I  was  a  member  of  the  board.  I  am  connected  with 
Millett,  Roe  &  Hagen,  bankers.  I  did  not  consult  with  any  one 
connected  with  my  company  before  the  price  of  milk  was  raised  to 
nine  cents,  on  or  about  November  1,  19*09 ;  but  I  know  that  it 
was  raised.  I  heard  of  it  at  the  meeting  of  the  board  held  a 
day  or  two  before  November  1st;  that  is  my  recollection.  AVo 
would  have  liked  to  raise  it  before  that,  but  we  waited  until  the 
other  companies  all  did.  Mr.  Kavanaugh  telephoned  me  and  told 
me  that  Borden's  had  raised  their  price  to  nine  cents.  I  had 
some  discussion  with  the  officers,  with  Mr.  Kavanaugh  and  the 
rest  of  the  board.  The  matter  simply  came  up  from  time  to 
time  that  milk  was  being  sold  too  cheaply.  I  should  say  that 
might  have  been  a  month  previous.  The  experience  of  a  year 
ago  proved  that  we  were  facing  a  heavy  loss  if  we  continued  at 
eight  cents.  My  board  did  not  authorize  me  or  any  one  else  to  con- 
sult any  other  milk  dealers  to  see  if  we  could  get  them  to  agree 


No.  45.]  247 

to  this  contemplated  raise.  My  own  business  judgment  told  me 
that  that  was  contrary  to  law.  I  could  not  tell  what  percentage 
of  milk  we  bought  on  Borden's  and  what  on  Exchange  prices. 
I  think  buying  milk  and  setting  the  price  from  month  to  month 
is  the  ideal  way.  The  Exchange  sometimes  makes  prices  in  the 
middle  of  the  month.  The  butter  and  cheese  price  would  influ- 
ence the  price  we  pay.  We  can  afford  to  pay  more  than  the 
butter  and  cheese  price.  In  my  opinion,  the  butter  and  cheese 
price  is  the  controlling  price  in  milk.  I  do  not  mean,  to  say  that 
the  New  York  market  does  not  pay  more,  but  we  have  to  pay 
more  to  get  the  milk.  I  did  not  discuss  with  any  one  the  question 
of  the  advisability  or  necessity  of  raising  the  price  of  milk  prior 
to  November  1,  1909.  I  did  not  authorize  any  officer  of  my  com- 
pany, or  any  employee  of  my  company,  to  consult  with  or  hold 
any  communication  with  any  officer  or  director  or  employee  or 
representative  of  any  other  milk  company,  prior  to  November  1, 
1909,  in  reference  to  an  advance  in  the  price  of  milk,  and  I  do 
not  know  of  any  such  consultation  or  communication.  I  know 
Mr.  Marsden,  and  I  think  I  have  met  Mr.  Dunlevy  Millbank  of 
the  Borden  Company.  Mr.  Marsden  is  a  member  of  Blair  & 
Company.  I  never  had  any  communications  with  either  gentle- 
man. Of  the  Sheffield  Farms,  Slawson  &  Decker  Company  I 
know  Mr.  Van  Bomel.  I  know  T.  O.  Smith  and  Christ.  Vagts 
of  the  Consolidated  Milk  Exchange.  I  had  no  conversation  with 
them  prior  to  November  1st,  relative  to  the  raise  in  price.  I 
think  it  is  three  years  since  we  have  had  a  representative  on  the 
Consolidated  Milk  Exchange.  I  do  not  know  as  there  is  any  prac- 
tice prevalent  in  my  company  for  the  purpose  of  standardizing 
the  milk  by  means  of  separators;  although  I  think  we  have 
separators  in  my  creameries.  We  made  more  money  in  1909 
than  we  did  in  1907  and  1908.  I  understand  that  Mr.  Kavanaugh 
was  approached  during  the  late  winter  or  early  spring  of  1909,  in 
reference  to  the  proposition  to  start  a  campaign  of  education  in 
order  to  educate  the  public  up  to  the  idea  of  paying  a  higher  price 
for  milk  through  newspaper  articles.  The  proposition  was 
that  we  were  to  contribute  money  for  the  distribution  of  articles 
calculated  to  show  that  the  price  of  milk  should  be  raised.  We 
turned  down  the  proposition.  We  are  at  present  selling  milk  for 


248  [SENATE 

eight  cents  a  quart.  We  lowered  our  price  because  we  found  our 
competitors  were  selling  the  milk  at  a  figure  less  than  nine  cents. 
I  sell  milk  at  wholesale  less  than  eight  cents  a  quart.  Two  condi- 
tions govern  the  basis  of  our  basis  price:  Bordens  and  the  Ex- 
change, and  our  independent  purchases,  from  month  to  month. 
We  prefer  to  buy  on  the  market.  I  consider  Bordens  is  a  pure 
gamble  for  six  months.  The  market  is  the  general  price  paid  in 
the  competitive  centers  for  milk,  at  that  time.  I  speak  primarily 
of  Pulaski.  There  is  more  competition  at  that  point.  There  are 
two  or  three  creameries  there.  It  is  not  customary  for  other 
RGW  York  milk  concerns  which  have  no  creamery  at  that  par- 
ticular point  to  step  in  and  buy  from  these  other  independent 
factories.  As  a  rule  in  ]STew  York  no  one  can  afford  to  sell  for 
more  than  Borden ;  that  is  generally  accepted  among  milkmen. 
My  recollection  is  that  we  had  a  meeting  of  the  board  on  the  after- 
noon before  the  notice  was  sent  out  that  prices  would  be  reduced 
from  nine  cents  to  eight  cents.  I  think  this  meeting  was  in  the 
latter  part  of  January,  the  23d  or  24th.  Very  often  I  think,  we 
wait  until  Borden  has  made  his  price  to  farmers  before  we  go  into 
the  country  to  buy  milk  and  close  our  contract  with  farmers. 
Undoubtedly,  Borden's  price  fixed  to  the  consumer  would  be  a 
factor  of  influence. 

Louis  J.  MILLER: 

My  place  of  business  is  at  90  East  One  Hundred  and  Tenth 
street.  I  started  in  business  under  the  name  of  the  Harlem 
Dairy  Products  Company.  I  obtained  my  milk  from  W.  Weed, 
Borne,  X.  Y.  He  supplied  me  with  milk  four  days.  He  sent 
one  of  his  men  over  to  me,  and  he  said  we  can't  ship  you  any 
more  because  the  health  department  stopped  us  from  shipping 
milk  from  Rome,  X.  Y.  He  shipped  to  other  dealers  in  the  city 
the  same  night,  To  the  United  Milk  &  Cream  Company.  They 
got  milk  in  the  cans  that  were  intended  for  me,  that  wras  how  I 
know.  We  were  there  at  the  station  when  the  milk  came  in,  and 
we  watched  the  train  when  it  came  in  from  Rome,  and  while 
we  went  over  to  get  our  tickets  in  the  office  of  Mr.  Harris,  he 
said  there  isn't  any  milk  from  Rome  for  the  Harlem  Dairy  Com- 
pany. Then  I  went  over  to  the  train  and  found  out  the  milk 
from  Rome,  N.  Y.,  came  to  the  Harlem  Dairy  Company,  and 


Xo.  45.]  249 

the  United  Milk  &  Cream  Company  get  it.  I  saw  the  cans 
marked  for  the  United  Milk  &  Cream  Company,  in  fact,  it  was 
?oine  of  our  cans,  twelve  cans  with  our  own  mark  L.  M.  B., 
meaning  Louis  Miller  &  Brother.  That  was  the  name  before  we 
went  in  the  milk  business.  We  were  in  the  cream  business  before 
under  that  name.  Before  I  stopped  off  with  Weeds,  I  saw  Mr. 
Carpenter  of  the  Phoenix  Cheese  Company  and  asked  'him  if  he 
could  ship  me  any  milk.  Then  he  said  he  could1,  he  guess,  about 
sixty  cans  a  day.  But  when  I  had)  a  contract  with  Weed  I  didn't 
care  to  make  any  other  contract  with  Carpenter,  because:  that 
would  be  too  much  for  me;  but  the  same  day  that  was  stopped 
off  to  me,  on  Monday,  October  12th,  I  was  asking  Mr.  'Carpenter, 
Tuesday  morning,  and  I  told  Mr.  Carpenter,  could  you  help  us 
out  with  some  cream  to-night,  and  he  said,  I  guess  about  twenty 
cans  to-night.  Mr.  Carpenter  sent  us  the  same  night  twenty  cans 
of  milk,  instead  we  were  supposed  to  get  forty  cans  from  Weed, 
and  we  got  only  twenty  cans  the  same  night  from  Mr.  Carpenter. 
I  made  a  contract  with  Mr.  Carpenter  to  supply  me  sixty  cans 
a  day  until  April  1,  1910.  The  Milk  Dealers'  Protective  Asso- 
ciation offered  Weed  ten  cents  a  can  more  on  milk  than  I  paid 
him.  I  paid  him  five  cents  above  quotation,  and  they  gave  him 
fifteen  cents  above  the  ^ew  York  quotation  and1  took  away  the 
milk  from  me.  Blefford  went  around  to  the  customers  that  I 
sold  to.  He  is  a  can  collector  for  the  protective  association.  He 
went  on  the  wagon  under  the  name,  "  George  Blefford,  Milk  and 
Cream  Dealer."  He  went  straight  to  every  one  of  our  customers 
and  offered  them  milk  at  $1.80,  that  is,  fifty  cents  below  what  I 
sold  it.  I  got  this  information  while  I  was  in  a  place  where  he 
offered  the  milk  and  I  heard  him  say  $1.80,  and  then  the  cus- 
tomers that  he  offered  went  and  told  me  there  is  a  man  came 
around  by  the  name  of  Blefford  and  he  offers  milk  to  every  cus- 
tomer, contract  for  six  months,  cash  security  $50,  to  every 
customer,  milk  to  be  sold  to  them  at  $1.80  per  can,  and  if  the 
price  should  be  lower  in  Xew  York  city,  then  he  would  come 
down  on  his  price  accordingly.  The  names  and  addresses  of 
some  of  these  parties  to  whom  these  offers  have  been  made  are 
Tone  Helfand,  1332  Park  avenue;  Isaac  Posner,  57  East  Ninety- 
eighth  street;  Theodore  Silber,  99  East  One  Hundred  and 


250  [SENATE 

Eleventh  street;  Nathan-  Mogeluf,  401  East  Seventy-eighth 
street.  They  have  stopped  the  dead  wagon  for  the  last  three 
weeks.  About  the  time  this  investigation  started.  First,  Blefford 
went  around  with  the  name,  Joe  Blefford,  and  then  when  I 
showed  his  card  to  all  the  customers  that  he  belonged  to  the  asso- 
ciation, the  can  collector,  they  stopped  him  off,  so  he  went  to 
work  and  had  his  wagon  painted  over  under  the  name  of  the  Cen- 
tral Dairy  Company,  and  he  went  around  and  offered  again  the 
same  customers  with  the  new  wagon,  and  when  they  asked  him 
why  he  changed  his  name,  he  said  because  there  is  another  Blef- 
ford in  the  business,  is  a  collector  for  the  association,  and  Miller 
says  I  am  the  Blefford,  and  I  have  to  change  my  name  under  the 
name  of  the  Central  Dairy  Company.  Mr.  Levy  of  the  Levy 
Dairy  Company  came  to  see  me,  and  said  I  shouldn't  bother  the 
trade.  Of  course  I  knocked  the  price.  He  told  somebody  else 
that  if  I  did  not  stop  that  he  would  get  square  with  me.  I  have 
about  fifty  customers  to  whom  I  have  sold  milk,  and  those  fifty 
customers  claim  they  can't  buy  my  milk  because  there  is  a  new 
milkman  now  under  the  name  of  Blefford  or  Central  Dairy  Com- 
pany who  is  offering  his  milk  fifty  cents  below;  we  don't  want 
you ;  the  man  gives  a  contract  for  six  months,  $50  cash  security, 
and  he  guarantees  us  from  any  trouble  of  the  health  department; 
why  should  we  'be  afraid  of  him  to  take  his  milk,  and  say  why 
should  we  buy  yours  and  pay  you  fifty  cents  on  every  can  of 
milk.  That  was  the  answer  of  every  grocerman.  When  I  was 
selling  ten  cents  below  the  association  price,  I  had  a  profit  of 
twenty-three  cents  on  a  can.  That  was  gross  profit.  The  asso- 
ciation price  is  thirty-eight  cents  above  the  Exchange  price.  That 
is  the  rule  year  after  year.  Above  the  Exchange,  except  the 
freight,  they  charge  you  extra.  For  instance,  to-day  the  market 
is  $1.70  in  the  Milk  Exchange  and  thirty- two  cents  freight,  that 
will  be  $2.02,  and  thirty-eight  cents  will  make  $2.40.  The 
grocermen  sell  dipped  milk  at  the  present  time  from  six  cents  to 
seven  cents  a  quart.  I  sell  milk  only  by  the  can  to  stores.  I 
buy  some  of  the  cans  of  the  Ironclad  Manufacturing  Company 
and  some  of  the  Dairyman's  Manufacturing  Company. 


No.  45.]  251 


N  MOGELUF  : 

I  reside  at  401  East  Seventy-eighth,  street  and  am  in  the  grocery 
business.  I  sell  milk.  Store  is  at  the  same  place  as  residence.  I 
know  Miller  Brothers.  I  am  buying  now  of  them.  I  commenced 
buying  about  six  months  ago  of  them.  I  didn't  have  any  agree- 
ment. He  promises  me  that  he  will  not  raise  in  a  year.  Suppose 
he  sells  ten  cents  lower  in  price  than  the  Exchange  market. 
Miller  said  he  would  do  that.  By  Exchange  price  I  mean  the 
price  of  the  Milk  Dealers  Protective  Association.  That  is  always 
thirty-eight  cents  above  the  Exchange  price.  Miller  agreed  to 
sell  me  ten  cents  below  the  Exchange  price.  That  is  the  retail 
milk  dealers'  price.  That  would  make  it  twenty-eight  cents  above 
the  Exchange  price.  (Copy  of  contract  signed  by  Blefford  to  in- 
duce witness  to  buy  from  him  copied  in  the  evidence,  reading  as 
follows)  :  "  I,  George  Blefford,  agree  to  serve  Nathan  Mogeluf  at 
401  East  78th.  Street,  N.  Y.  City,  milk  according  to  rules  and 
regulations  of  the  Board  of  Health  from  November  7th/09  to 
November  Yth/10  at  12  cents  below  Exchange  price  $1.92. 

"  GEORGE  BLEFFORD, 
"427  EAST  9ra  ST.,  NEW  YORK  CITY." 

"  Exchange  price  for  the  coming  year." 

Yes,  Blefford  gave  me  the  following  card: 

"  Telephone  2572  Lenox 

"  GEORGE  BLEFFORD, 
"  WHOLESALE  DEALER  IN 
"  MILK  AND  CREAM 

"427-435  East  90th  Street, 
"Residence  428  East  89th  St.,  New  York." 

About  two  weeks  later  he  gave  me  the  following  card  : 

"  CENTRAL  DAIRY  COMPANY 
"  WHOLESALE  DEALERS  IN 

"  MILK  &  CREAM 

"  428  EAST  80TH  STREET, 

"  NEW  YORK." 


252  [iStENATE 

I  have  known  Blefford  about  five  months.  He  came  to  me  about 
two  weeks  from  the  time  I  started  to  buy  milk  of  Miller.  Costly 
also  came  to  me.  His  place  is  First  avenue  between  Seventy-sixth 
and  Seventy-seventh  streets.  When  I  started  to  buy  milk  of 
Miller  about  two  weeks,  Costly  came  to  me,  he  says  why  I 
shouldn't  buy  milk  of  him  ?  I  says  "  Because  I  get  it  ten  cents  a 
can  cheaper.  I  use  three  cans  a  day,  is  thirty  cents."  He  says, 
"  I  couldn't  give  it  cheaper  the  milk,  but  he  wouldn't  stay  long, 
that  Miller  wouldn't  stay  long  in  the  business  <and  you  would  have 
to  buy  of  me  again  anyway."  "  Well,"  I  says,  "  You  sell  me  any 
time  if  I  come  to  you,  if  I  pay,  you  will  sell  to  me."  He  says, 
"  Certainly  I  will."  So  all  right,  about  two  weeks  after  I  buy 
milk  of  Miller,  Blefford  came  to  me  and  asked,  "  Where  you  buy 
milk?"  "From  Miller."  "How  much  do  you  pay?"  '  I  said, 
"  So  much."  Blefford  says,  "  I  got  a  new  business."  He  says, 
"  I  am  a  farmer  and  my  father  is  a  farmer  and  we  have  milk. 
We  sell  milk  wholesale  in  New  York  city,  about  130  cans."  He 
says,  "In  a  car  is  180  cans  and  we  have  got  50  cans  and  we  have 
to  pay  anyway  for  the  whole  car."  He  says,  "  Freight,  that  the 
milk  don't  cost  me  anything  to  deliver  it  from  the  country  and  I 
can  sell  it  for  $1.80  to  you."  I  says,  "All  right.  Make  forty 
cents  a  can  cheaper  is  a  whole  lot  of  money."  "  Will  you  make  a 
contract  ?  "  I  said,  "  Certainly,  I  will."  He  started  to  make  the 
contract.  "  I  will  be  here  again  to-morrow."  I  couldn't  make  it 
now  because  I  don't  know  how  to  make  out  a  contract.  I  asked 
him  for  one  of  them.  "  I  will  be  here  again  to-morrow."  He 
came  again  to-morrow  and  we  made  the  contract.  (Same  contract 
already  went  in  the  record.)  I  said,  "Blefford,  suppose  you  were 
short  of  milk,  what  am  I  going  to  do  ?  "  He  says,  "  Take  $4-0  of 
my  cash  as  security,  and  if  you  don't  have  milk  you  will  have 
$40."  "  I  told  him  that  isn't  enough,  $40.  What  am  I  going  to 
do  that  time  if  I  can't  get  milk  two  or  three  days,  I  lose  the  whole 
trade."  He  says,  "  I  will  give  you  $40  cash  and  one  week  milk, 
but  the  week  milk  you  have  got  to  pay  for,  not  now,  but  in  a  year, 
if  you  finish  the  contract,  then  you  pay  me."  He  says,  "  All 
right,  I  am  satisfied."  He  makes  the  contract.  "  I  will  buy  after 
the  first  week."  I  told  him  that  on  Sunday.  Of  course,  Saturday 
I  settled  with  Miller,  and  Sunday  —  that  was  I  think  about  Wed- 


No.  45.]  253 

nesday.  Wednesday  Miller  came  to  me  and  said,  "  Blefford  was 
here  ?  "  I  says,  "  Yes."  He  says,  "  To  sell  you  milk  ?  "  "  Yes." 
I  told  Miller  that  I  like  to  stop  to  buy  milk  because  I  get  it  forty 
cents  cheaper.  He  showed  me  a  card  like  the  same  card,  but  on 
the  card  was  can  collector  of  the  association.  The  following  is 
the  card: 

"  MILK  DEALERS  PROTECTIVE  ASSOCIATION, 
"  62.1  EAST  12xn  STREET,  NEW  YORK  CITY. 
"  GEORGE  W.  BLEFFORD,  CAN  COLLECTOR." 

Yes,  that  was  the  card  that  Miller  showed  me.  At  that  time  I 
told  him  what  I  would  like  to  do.  The  man  told  me  he  was  a 
farmer,  that  was  the  reason  he  sold  milk  because  it  wasn't  ex- 
pensive. He  says,  "  If  you  don't  want  to  believe  me,  buy  milk 
of  him,  but  I  know  sure  that  is  the  Milk  Association."  Well,  it 
was  Friday,  iand  Friday  I  went  to  the  telephone,  the  same  num- 
ber, I  think  that  is  the  same  number,  and  I  called  upon  the  same 
number  on  the  telephone  and  I  asked  him,  "  Who  are  you  ?  "  He 
says,  "  I  am  the  stable  man  from  the  Mutual."  "  Where  is  Blef- 
ford now  ?  "  He  says,  "  He  will  soon  be  there."  "  Well,  tell  him 
he  shouldn't  bring  any  milk  Sunday."  Of  course,  I  see  this  is  not 
right.  Blefford  didn't  come  to  me,  and  he  delivered  milk  Sunday, 
two  cans,  and  Miller  brought  milk.  I  didn't  use  any  milk  of 
Blefford.  Of  course  I  wanted  to  make  the  forty  cents  and  I  used 
Miller's  milk.  Monday  he  didn't  come  and  he  didn't  take  any 
milk,  and  the  milk  stayed  outside.  I  didn't  use  his  milk.  I  let 
it  get  sour,  left  it  outside.  Monday  Blefford  came  to  me,  "  Why 
didn't  you  use  the  milk,"  he  said.  "  Well,  I  found  it  was  from 
the  Association,  I  didn't  want  to  bother.  I  have  to  bother  one 
week  with  you  and  you  lose  your  $40.  I  don't  want  to  make  the 
$40,  make  me  more  trouble  than  the  $40."  He  said,  "You 
wouldn't  buy  of  me  ?  "  I  said,  "  Why,  of  course,  I  know  you  are 
of  the  Association."  He  said,  "  No."  The  next  week  he  came 
with  another  card,  headed  "  Central  Dairy  Company."  He  came 
with  a  new  wagon  and  new  cans,  about  fifteen  new  cans.  He  took 
the  milk  away  from  me.  He  says,  "  Well,  you  use  my  milk?  "  I 
said,  "  I  couldn't  use  it.  I  couldn't  stop  buying  of  Miller.  Of 
course,  I  know  this  thing  sure,  you  have  got  the  milk  from  the 


25-i  [  SENATE 

Association."  He  says,  "  You  don't  believe  me  ?  "  I  said,  "  Cer- 
tainly, I  don't  believe  you."  After  a  week  he  came  again.  He 
said,  "Well,  you  wouldn't  buy  milk  of  me?  "  I  said,  "  No,  cer- 
tainly I  wouldn't.  If  I  know  sure  that  the  milk  belongs  to  you, 
that  you  got  it  from  your  farm,*  I  would  be  glad,  if  I  can  make 
eighty  cents  or  $1  a  day,  why  I  make  it."  He  says,  "All  right." 
He  showed  me  the  new  card  of  the  Central  Dairy  Company.  I 
said,  "With  whom  you  partner?"  He  said,  "My  father."  I 
asked  him,  "  Who  is  the  Company  ?  "  He  said,  "  My  father  and 
I."  All  right,  I  says,  "  Now  I  wouldn't  buy  any."  "  Why  ?  " 
"  Because  I  don't  want  to."  He  said,  "All  right,  I  will  bring  to- 
morrow my  father  here  and  he  will  explain  to  you  that  he  is  the 
farmer  and  he  is  responsible  for  me,  that  if  I  wouldn't  sell  you 
milk,  he  will  be  responsible."  "All  right,  bring  your  father,"  I 
said.  The  second  day  an  old  man  came  and  he  says,  "  This  is 
my  father."  The  old  man  speaks  German.  I  asked  him,  "  Is  that 
your  son  ?  "  He  said,  "  Yes."  He  even  couldn't  speak  good  any 
more.  Maybe  he  do  extra,  I  don't  know.  He  couldn't  speak. 
"  Bo  you  know  Blefford  ?  "  He  said,  "  That  is  my  son."  I  said, 
"  Where  do  you  live  ? "  He  said,  "  I  live  in  the  country."  I 
said,  "  Have  you  got  a  farm  ?  "  He  said,  "  Yes."  I  said,  "  Have 
you  got  milk?"  He  said,  "Yes,  I  got  milk."  I  said,  "All 
right."  He  says,  "  I  want  to  sell  to  you,  my  son  together  in  part- 
ner." I  said,  "All  right."  He  says,  "  But  you  don't  believe  me. 
But  he  said  that  is  my  son  and  We  will  sell  cheaper  than  the 
Association."  Then  I  promised  him  again.  I  believed  him  when 
the  father  came  with  him.  I  promised  him  again,  and  the  second 
day  I  told  him  he  should  come  and  make  with  me  a  contract,  a 
new  one.  He  said,  "All  right,"  but  on  the  second  day  he  didn't 
come  any  more.  I  told  him,  "  Blefford,  I  know  for  sure  you  are 
from  the  Association.  Of  course,  I  see  your  card  and  at  the  bot- 
tom of  the  card  is  can  collector."  He  said,  "  That  is  my 
brother." 

GEORGE  L.  NICOIXS  : 

I  am  a  director  of  the  Borden  Condensed  Milk  Company  and 
have  been  about  ten  years.  I  attend  the  directors'  meetings, 
acting  on  committees.  I  am  also  general  counsel  of  the  company. 
I  know  none  of  the  directors  of  the  Mutual  Milk  &  -Cream  Com- 


No.  45.]  2i5'5 

pany  or  Sheffield  Farms  Company  personally,  except  Mr.  Ely 
who  is  a  member  of  the  Consolidated.  Milk  Exchange.  I  have 
never  been  present  at  meetings  where  the  raising  of  the  price  of 
milk  was  discussed.  Speaking  of  the  good  will  of  the  Borden 
Condensed  Milk  Company,  that  matter  was  given  very  careful 
consideration.  All  the  elements  that  go  to  give  value  to  good 
will,  past  earning  capacity,  were  carefully  considered,  and  the 
company  was  advised  by  my  firm,  as  counsel,  as  to  the  legality  of 
the  stock,  and  the  directors  passed  on  it  as  a  practical  business 
proposition. 

CHRISTIAN  OHER  : 

I  reside  at  154  Eagle  street,  Brooklyn.  Am  a  milk  dealer. 
I  own  the  National  Dairy  Company.  I  sell  bottled  milk.  Prior 
to  November  1st  the  price  of  my  bottled  milk  was  eight  cents. 
I  did  not  raise  the  price  to  nine  cents.  I  have  never  raised  the 
price  to  nine  cents.  I  attended  a  meeting  in  Williamsburgh,  at 
Ten  Eyck  and  Lorimer  streets.  I  believe  John  P.  Wierck,  G.  C. 
Weatherhorn,  George  Eyder  were  there,  and  there  were  a  lot 
of  South  Brooklyn  people,  but  I  don't  know  their  names.  The 
speaker,  John  P.  Wierck,  presided,  the  president,  he  was  the 
first  speaker.  I  came  in  late.  The  only  thing  I  heard  was  ar- 
rangements being  made  for  a  banquet  in  'St.  Mark's  Hall,  Man- 
hattan. I  attended-  that  banquet.  Mr.  Beakes  made  a  speech. 
The  Empire  State  Produce  Company,  Otto  Huth,  manager,  told 
me  to  go  down  to  this  meeting  in  Williamsburgh.  There  were 
railroad  fellows  at  the  banquet.  Some  one  from  the  Lehigh 
Valley,  New  York  Central,  and  D.  L.  &  W.,  and  I  believe  there 
was  some  one  from  the  Ontario  &  Western,  if  I  am  not  mistaken. 
I  d'o  not  know  of  any  other  meetings  outside  of  this  one  that  I 
have  mentioned.  I  was  talking  with  a  friend  of  mine  to  the  effect 
that  milk  should  be  nine  cents,  but  we  did  not  dare  to  take  the 
step  because  we  would  probably  lose  the  business,  and  I  sell 
wholesale  at  the  same  time,  and  I  did  not  think  it  was  necessary 
to  go  to  nine  cents,  and  I  couldn't  get  it.  The  class  of  trade  I 
have  got  would  hardly  pay  nine  cents.  In  my  business,  one  man 
and  a  horse  takes  out  from  fifteen  to  thirty  cases-  of  twelve  bottles 
each  in  a  day.  I  have  four  creameries.  One  creamery  is>  near 
Amsterdam,  N.  Y. :  one  near  Oneida;  one  is  on  the  other  side 


2'56  [SEN  ATI-: 

of  Oneida;  and  one  in  Uniondale,  Pa.  In  one  place  I  buy  on 
Borden's  price ;  another  one  I  pay  ten  cents  above  Exchange ;  and 
in  another  one  I  pay  Exchange  prices,  My  agreement  when  I 
buy  at  Exchange  prices  is,  "I  will  buy  your  milk  for  the  Ex- 
change price,  or  five  cents  above  of  five  cents  below/'  etc.  That  is 
the  contract.  When  I  buy  on  Borden's  prices,  I  pay  what  Borden 
pays.  If  they  drop,  I  do  the  same.  I  don't  think  I  am  losing 
anything  on  milk  at  eight  cents.  I  do  not  make  so  much  in  the 
summer.  There  is  loss  of  bottles  and  expenses  attached  to  it, 
shrinkage,  etc.  We  fill  about  240  cases,  and  we  lost  two  cans  of 
milk  shrinkage.  Now,  when  you  pay  $1.70  in  the  country  for 
milk  and  thirty-two  cents  freight,  you  simply  will  bring  that  up. 
The  price  is  pretty  low,  and  horses  and  horse  feed  are  high.  The 
lowest  price  that  I  got  milk  last  summer  is  a  dollar  a  can.  That 
i-  two  and  one-half  cents  a  quart.  I  make  a  little  more  profit 
during  the  summer  months  than  I  do  in  the  winter  months.  In 
the  summer  you  have  to  buy  ice. 

JOTTX  PAUL: 

I  am  vice-president  of  the  Mutual  Milk  £  Cream  Company 
and  was  elected  April  2,  1909.  I  was  a  director  one  year  pre- 
vious to  that.  Am  in  the  manufacturing  business.  Separators. 
The  DeLaval  Separator  Company.  I  am  cashier.  I  never  have 
been  to  any  of  the  meetings  of  the  Mutual  Milk  £  'Cream  Com- 
pany, other  than  directors  or  stockholders.  I  remember  the  mat- 
ter coming  before  the  board  with  reference  to  fixing  a  price  to 
producers  of  iiiilk.  I  cannot  specify  particularly  one  case,  but 
it  was  done  frequently.  The  matter  of  fixing  prices  in  the 
country  is  brought  up  from  time  to  time  and  usually  referred  to 
the  executive  committee.  Borden's  and  Exchange  prices  are 
usually  mentioned  as  a  basis.  We  repeatedly  establish  a  price 
at  our  meetings,  that  is,  independent  of  Borden's  or  Exchange. 
It  is  possible  to  adjust  a  separator  so  that  it  will  run  milk  at  a 
certain  percentage  of  butter  fat  and  save  the  excess  of  cream. 
I  don't  know  whether  a  separator  could  be  adjusted  to  leave  3 
per  cent,  or  3%  per  cent,  of  butter  fat  in  the  milk.  We  ad- 
vanced the  price  -previous  to  November  1,  1909,  but  we  couldn't 
stand  out  alone  and  keep  up  the  price,  and  I  should  say  that  our 
desire  was  to  get  all  the  milk  dealers  to  advance  the  price.  I 


No.  45.]  257 

think  the  advance  was  generally  about  November  1st  in  the  price 
of  milk.  It  happened  to  be  concerted  action.  Borden's  started 
the  ball  rolling  and  every  one  went  up.  I  think  there  was  some- 
thing in  the  discussion  that  I  had  previous  to  November  1st  in 
which  the  date  November  1st  was  mentioned  as  the  'day  when  the 
price  should  be  raised,  o>r  could  be  raised  advantageously.  1 
think  the  matter  of  the  discussion  of  the  raise  in  price  of  milk 
was  mentioned  from  time  to  time,  as  of  October  1st,  November 
1st  or  December  1st,  for  that  matter.  I  understand  that  when 
the  change  was  to  take  place  it  was  to  be  October  1st.  October 
to  April  is  the  winter  price  and  April  to  October  is  the  summeir 
price.  I  think  they  are  all  anxious  to  go  independent  of  any 
concerted  action.  I  have  never  had  any  communication  with  any 
of  the  officers  o>r  directors  of  the  Borden  Condensed:  Milk  Com- 
pany. I  have  never  had  any  communications  with  the  officere  or 
directors  of  the  Sheffield  -Company.  The  only  member  of  the 
Consolidated  Milk -Exchange  that  I  know  is  T.  O.  'Smith.  In 
regard  to  the  protective  association  I  understood  the  purpose  and 
existence  of  the  association  wa,s  in  reference  to  having  certain 
bills  passed  by  the  Legislature.  I  heard  some  thing  about  our 
company  paying  $500  to  them,  but  I  don't  know  what  it  was 
for.  I  heard  about  the  campaign  of  education  mentioned  in  the 
committee  of  the  board  of  directors.  It  was  a  proposition  to 
educate  the  people  as  to  the  advantage  of  having  good  milk  and 
the  extra  cost  incurred  in  delivering  such  milk  and  the  necessity 
of  giving  a  higher  price.  It  was  turned  down  flat.  They  didn't 
believe  in  spending  money.  In  regard  to  the  $500'  which  we 
paid  the  protective  association,  I  didn't  investigate  the  people 
it  went  to  nor  the  reason  why  it  was  paid,  but  I  don't  think  after 
your  information  that  I  would  let  it  happen  again. 

ISAAC  POSNEK,  GROCEE: 

I  am  in  the  grocery  business  at  57  East  Ninety-eighth  street. 
I  sell  milk.  I  get  my  milk  from  Liebermami  Dairy.  Miller  came 
to  me  and  said  if  I  would  take  milk  from  him  he  would  sell  it  to 
me  ten  cents  cheaper  than  Liebermann.  Then  I  took  from  Miller 
about  two  months.  Then  Blefford  came  to  me  and  said  he  had  a 
farm  and  he  would  sell  milk  to  me  at  forty  cents  cheaper  than 
9 


258  [SENATE 

anybody  or  $1.80.  I  took  two  cans  from  Blefford  and  two  cans 
from  Miller.  Sometimes  over  two  cans.  Then  I  stopped  Blefford 
and  took  all  from  Miller  as  some  people  say  Blefford's  milk  is 
bad.  Finally  Liebermann  came  to  me  and  sold  me  milk  ten  cents 
cheaper.  Then  I  took  from  Liebermann.  Blefford  came  and  said 
that  the  man  was  a  collector  of  the  Retail  Milk  Dealers'  Protec- 
tive Association.  I  heard  that  Miller's  hi  uses  "were;  poisoned  by 
the  association. 

HENKY  EAUCH: 

I  reside  at  1283  Hancock  street,  Brooklyn,  and  am  in  the  milk 
business  under  the  name,  "  Henry  Ranch  Co./'  principal  office,  27 
Garden  street.  I  am  the  president.  .Mr.  F.  11.  llucg  is  vice- 
president;  Mr.  Gruehn,  the  secretary.  We  are  capital i/ed  at 
$45,000,  all  common  stock.  1  own  pretty  near  all  the  stock.  The 
stock  was  issued  for  property.  It  is  a  Xcw  York  corporation. 
organized  three  years  ago.  I  was  in  the  milk  business  thirty-two 
years  previous  to  that.  The  first  year  we  paid  12  per  cent,  divi- 
dends; the  first  part  of  the  second  year  we  paid  "12  per  cent,  divi- 
dends; and  the  last  part  of  the  second  year  we  paid  G  per  cent, 
dividends;  last  year,  we  didn't  pay  anything.  We  draw  a  portion 
of  the  profits  of  the  corporation  in  salaries.  1  have  not  increased 
the  salaries  since  the  corporation  was  organized.  I  have  no  branch 
stores.  I  have  creameries  in  the  country;  one  at  Bridgeville, 
N*.  J.,  Willawanna,  Pa.,  Apalache,  Cortland  and  East  Homer, 
~N.  Y.  I  sell  all  my  milk  in  New  York.  I  was  a  stock- 
holder in  the  Milk  Exchange,  Limited,  owning  five  shares.  I  was 
never  an  officer  or  director  of  the  Limited.  About  the  same  mem- 
bers composed  the  Consolidated  that  composed  the  Limited.  The 
five  shares  were  transferred  to  the  Consolidated  Exchange.  I 
boought  my  stock  in  the  Consolidated.  I  have  never  been  an  offi- 
cer or  director  of  the  .Consolidated.  I  think  I  attended  one  stock- 
holders' meeting  of  the  Consolidated.  I  used  to  attend  meetings 
of  a  creamery  insurance  and  their  meetings  were  held  after  the 
meetings  of  the  Exchange,  and  sometimes  I  went  in  and  they 
didn't  object  to  me.  There  is  no  difference  in  the  business  done 
by  the  Milk  Exchange,  Limited,  and  the  Consolidated  Milk  Ex- 
change, just  the  same  business  exactly.  The  old  Milk  Exchange, 
Limited,  fixed  the  price  or  value  of  milk  and  the  -Consolidated  does 


No.  45.]  259 

the  same  thing.  I  would  describe  the  Consolidated  a's  simply  a 
continuation  of  the  old  Exchange.  I  found  out  the  price  that  was 
placed  upon  milk  by  the  'Consolidated  through  the  country  papers 
and  a  postal  card  frbrn  the  "  Milk  Reporter."  Regarding  the  uses 
of  the  price  fixed  by  the  Consolidated,  I  would  say  that  we  had  an 
equal  price  to  buy  and  sell  on ;  before  the  Milk  Exchange  started 
we  had  an  awful  trouble  with  the  prices  of  milk.  At  that  time  a 
good  many  farmers  were  shipping  in  and  they  wasn't  on  the  same 
standard  as  now  where  all  the  creameries  are.  At  that  time 
Orange  county  was  about  the  farthest  district  where  we  drawed 
milk  from,  and  every  farmer  came  down  every  half  month  or 
month  to  collect  his  bill;  then  he  brought  his  bill  along  and  he 
says  this  is  the  price  of  milk,  and  whenever  we  paid  this  price, 
another  one  claimed  this  is  the  price  of  milk,  and  there  was  maybe 
three  or  four  different  prices  all  round,  and  sometimes  it  hap- 
pened that  one  farmer  came  down  and  we  told  him  that  this  is 
the  price  of  milk  and  we  paid  him,  and  he  came  back  the  next 
month,  he  came  down  and  he  said,  "  You  didn't  pay  me  enough. 
I  got  to  have  a  quarter  of  a  cent  more  "  and  I  had  to  pay  it  out 
of  my  own  pockets,  and  there  was  a  mix-up  all  the  way  around ; 
so  they  came  to  the  conclusion  to  come  to  one  standard  price  and 
they  organized  the  Milk  Exchange  so  that  we  would  go  by  it  and 
the  farmers  should  go  by  it  and  we  can  buy  and  sell,  we  can  have 
an  equal  price,  a  benefit  to  both  parties.  That  was  intended  at 
that  time,  that  for  the  farmers  should  take  about  half  of  the  stock 
of  the  Milk  Exchange,  so  both  parties  had  something  to  say  about 
the  price,  so  that  there  would  be  no  fighting.  But  some  of  the 
farmers  didn't  take  stock,  and  others  —  you  know  what  the 
farmers  are  —  they  refused  to  give  out  any  money  and  when  the 
other  farmers  found  out  that  there  was  only  a  few  taking  stock, 
maybe  some  of  them  needed  a  little  money  there  at  that  time, 
they  sold  out,  they  came  right  to  the  creamery,  me  there,  and 
offered  their  stock,  and  I  suppose  they  took  it  up  again.  That  is 
where  it  comes  to,  that  it  is  only  maybe  two  or  three  farmers 
now  or  countrymen  who  owns  stock  in  the  company.  Of  course, 
they  have  no  benefit  from  it  there ;  the  money  is  lying  idle ;  there 
is  no  money  benefit  to  it.  All  they  can  pay,  $2  assessment  every 
year.  I  buy  some  on  the  Exchange  price  because  the  farmers  ask 
me  to  adopt  it.  I  have  been  offering  Borden's  prices  and  they 


260  [SENATE 

refused  to  take  Borden's  price ;  they  wanted  the  Exchange  prices. 
I  subscribe  to  the  "  Milk  Reporter  "  and  I  think  I  pay  twenty-five 
cents  extra  for  the  postal  card.  If  the  Milk  Exchange  meets  one 
day,  we  generally  get  the  price  the  next  day  after,  through  the 
postal.  I  do  not  know  of  any  agreement  among  the  members  of 
the  Consolidated  to  maintain  or  pay  the  price  fixed  by  the  board 
of  directors.  The  reason  most  of  the  members  pay  the  Exchange 
price  was  because  it  gets  published  in  all  the  papers  and  they  are 
all  governed  by  that.  It  is  my  opinion  that  when  the  Consolidated 
Milk  Exchange  establishes  a  price  and  that  price  is  published  in 
the  paper  that  it  affects  a  great  majority  of  the  trade  and  they 
come  to  that  price  and  expect  to  buy  or  sell  on  that  price.  I  am 
selling  bottle  milk  now  at  eight  cents  just  the  same  as  before.  I 
sell  dip  milk  at  from  six  cents  to  six  and  one-quarter  cents  a  quart 
wholesale.  I  sell  about  3,000  quarts  of  bottle  milk  and  about  150 
forty-quart  cans  of  dip  milk.  I  do  not  lose  money  by  selling 
bottle  milk  at  eight,  cents  a  quart.  I  am  making  the  business  pay. 
There  is  a  great  flush  of  milk  in  the  market  at  present.  I  did  not 
raise  my  price  in  1907.  I  managed  to  make  a  living  without  rais- 
ing it.  I  think  I  paid  Exchange  prices  during  1907,  1908  and 
1909.  Yes,  I  remember  a  man  named  Gorman,  coming  around 
selling  books.  He  also  wanted  to  start  a  so-called  campaign  of 
education.  I  paid  no  attention  to  it.  I  am  not  a  stockholder  in 
the  Dairymen's  Manufacturing  Co.  John  Walsh  and  a  man 
named  Sidney  Bell  collect  my  cans.  Bell  lives  in  Jersey.  I  paid 
these  men  about  $5  a  year.  Following  is  my  method  of  handling 
milk  from  the  time  I  receive  it  from  the  farmer  until  I  deliver 
it  to  the  consumer  here  in  the  city:  When  I  get  the  milk  in  cans 
-just  now  they  bring  it  once  a  day,  they  have  to  cool  the  night's 
milk  and  then  bring  it.  Some  of  them  haven't  properly  the  water, 
satisfactory  water,  to  cool  it  and  keep  it  over  night,  they  have  to 
come  twice  a  day  during  the  summer.  Xow  when  they  bring  in 
the  milk,  it  is  received  by  men  at  the  creameries;  it  is  measured. 
From  there  it  goes  into  the  receiving  vat,  strained  and  goes  in  the 
receiving  vat.  From  the  receiving  vat,  I  pump  it  up  to  a  cooler, 
pipe  cooler,  the  upper  part  going  to  well  water  and  the  lower 
part  ice  water,  cool  it  right  down  to  about  forty  or  thirty-eight. 
Then  my  milk  is  ready  to  ship,  whatever  I  want  to  ship  or  bottle, 


No.  45.]  261 

that  is  to  be  shipped  in  cans  or  bottled,  and  the  rest  is  run  through 
the  separator  and  make  butter  and  cheese,  either  make  full  cream 
cheese,  half  cream  cheese,  sweet  butter,  salt  butter,  pot  cheese; 
whatever  the  demand  is  in  the  market. 

After  that  is  cooled,  then  I  put  it  in  the  bottle  filler  and  then 
it  is  strained  again  through  cotton;  all  the  milk  gets  strained 
through  cheese  cloth  and  cotton  so  everything  is  taken  out  and  it 
goes  in  the  bottle  filler  and  is  bottled  and  capped  and  with  the 
slips  on,  the  date  one,  and  ice  up  and  put  in  the  cases  and  put  it 
in  the  cars  and  ship  it.  When  it  arrives  on  the  platform  here  in 
iNew  York  city,  I  have  my  wagons  over  there  to  load  it  up  and 
bring  it  right  over  to  my  place.  Each  wagon  should  take  about 
250  to  300  quarts  on  a  good  route.  I  can  make  a  little  money  at 
eight  cents  a  quart  bottle  milk,  when  each  wagon  takes  out  from 
250  to  300  quarts.  In  order  for  a  wagon  to  be  profitable,  I  should 
say  that  it  could  not  deliver  less  than  200  quarts. 

JAMES  C.  RT.DEK  : 

I  reside  at  Central  Valley,  N.  Y.,  forty- seven  miles  from 
Jersey  City.  I  own  a  farm.  I  produce  milk  in  a  small  way.  I 
have  been  in  the  milk  business  since  1876  as  a  milk  dealer.  My 
principal  place  of  business  is  located  at  102  Normal  avenue,  Green- 
point,  Brooklyn.  I  am  in  business  under  the  name  of  James  C. 
Rider  &  Co.,  incorporated  under  the  laws  of  New  York.  We 
were  originally  $6,000  capital  stock.  About  two  years  ago,  our 
capitalization  was  increased  to  $24,000.  I  am  president  of  the 
corporation.  W^e  have  not  paid  any  dividends  in  the  last  three 
years.  I  own  the  majority  of  the  stock.  I  have  a  creamery  at 
Bridgewater,  N.  Y.  I  sell  my  milk  in  New  York.  I  pre- 
sume I  was  a  stockholder  in  the  Milk  Exchange,  Limited.  I  am 
a  stockholder  in  the  Consolidated  Milk  Exchange.  I  own  six 
shares.  I  do  not  remember  how  many  I  had  in  the  old  Exchange. 
I  have  never  been  an  officer,  director  or  stockholder  in  Borden's, 
Sheffield  Farms  or  the  Mutual  Company.  I  have  never  owned 
any  stock.  I  have  attended  stockholders'  meetings  of  the  Con- 
solidated Milk  Exchange.  I  have  attended  at  Harrison  street 
and  Jersey  City.  In  the  old  Exchange,  we  bought  milk  through 
them  ;  with  the  new  Exchange,  we  have  not.  That  is  the  differ- 
ence in  the  business.  The  Milk  Exchange,  Limited,  fixed  or 


262  [-SENATE 

found  the  values  of  milk,  just  the  same  as  the  Consolidated  Milk 
Exchange  does  at  the  present  time.  The  Consolidated  iviilk  Ex- 
change is  beneficial  to  me  because  it  establishes  a  price  which  gov- 
erns the  market,  that  and  the  Borclen  price.  So  far  as  I  am  able 
to  tell,  they  average  about  the  same  within  the  past  two  or  three 
years.  At  those  meetings,  men  meet  and  discuss  the  value  of 
milk,  the  value  of  butter,  the  value  of  cheese,  and  by-products, 
and  in  that  way,  come  to  a  conclusion  what  a  quart  of  milk  is 
worth.  The  dealers  usually  give  an  idea  of  what  surplus  or 
scarcity  there  is,  whichever  there  may  be  in  their  locality ;  and 
from  that  the  conclusion  is  drawn  that  a  quart  of  milk  is  worth 
so  much  money.  I  have  heard  considerable  discussion  here  be- 
tween the  counsel  —  I  am  surprised  at  the  attitude  that  the  coun- 
sel and  the  whole  thing  has  seemed  to  be  taking  on.  It  isn't 
pleasing  to  me.  I  believed  that  this  business  was  to  better  the 
condition  of  the  milk  business  for  the  people  and  for  the  dealer; 
and  from  what  I  have  seen  and  heard  this  morning,  it  seems  to 
be  entirely  antagonistic  to  that  point.  Now  I  don't  feel  that  we 
could  do  business  without  the  "  Milk  Reporter."  I  don't  feel  that 
we  could  do  business  without  the  milk  cards  that  the  "  Reporter  " 
issues.  I  receive  the  cards.  It  gives  me  a  broader  idea  —  that 
is,  it  gives  the  people  that  advantage  and  opportunity  of  inform- 
ing themselves  if  they  want  to.  Now,  I  recommend  it  to  my  farm- 
ers and  they  are  pleased  to  get  it.  I  am  pleased  to  put  the  "  Milk 
Reporter  "  in  every  farmer's  hands  that  I  can,  just  as  much  as  the 
machinist  is  to  put  the  "  Scientific  American  "  in  the  machinist's 
hands.  I  think  the  "  Milk  Reporter  "  is  just  as  much  use.  I  don't 
know  a  man  on  the  staff  of  the  "  Milk  Reporter,"  but  I  have  a 
little  "  Milk  Reporter "  in  my  pocket  at  home,  I  think  pub- 
lished in  1876,  when  we  gave  a  man  a  few  dollars  to  go  around 
and  investigate  the  condition  of  the  market,  and  just  as  you  have 
been  informed  here  this  morning,  this  man  would  say  I  am  paying 
so  and  so.  I  am  paying  so  and  so.  And  it  was  just  simply  a 
continual  unsettled  condition  of  the  market  and  law  suits  all  the 
time.  Some  of  the  people  are  older  than  you  are  and  possibly 
older  than  I  am  could  give  a  great  deal  better  idea  of  that  than  I 
have  given  to  you.  Well  now,  the  "  Milk  Reporter  "  has  certainly 
overcome  a  good  many  of  those  little  things.  They  carry  into  the 


No.  45.]  263 

home  and  into  the  families  the  condition  of  the  market,  and  I  do 
not  think  that  we  could  very  well  get  along  without  just  the  mem- 
orandum that  we  have.  By  memorandum,  I  mean  the  "  Milk  Re- 
porter "  and  the  card.  They  publish  the  price  established  by  the 
Milk  Exchange.  I  am  quite  sure  that  when  I  see  the  price  in 
the  "  Milk  Reporter  "  that  it  is  correct  and  the  valuation  that  the 
Milk  Exchange  has  established.  The  board  of  directors  of  the 
Consolidated  Milk  Exchange  is  composed  largely  of  dealers  in 
milk,  but  I  want  to  say  right  there  that  the  stock  was  offered  to 
the  fanners  just  as  much  as  to  the  dealers.  I  think  the  reason 
the  farmers  dropped  out  and  that  there  are  very  few  farmers  on 
the  board  of  directors  now  is  largely  due  'to  the  farmer's  per- 
fect confidence  in  the  dealers.  I  think  it  would  be  a  good  plan 
for  all  the  milk  coming  into  New  York  to  be  under  one  manage- 
ment, and  that  management  under  strict  State  supervision.  I  am 
losing  money  at  the  eight-cent  price.  I  did  not  raise  the  price 
on  November  1st  and  if  the  eight-cent  rate  was  continued 
throughout  the  year,  I  would  make  enough  in  the  months  when 
milk  was  cheap  so  that  I  would  realize  a  fair  profit  on  the  in- 
vestment. I  sell  about  2,000  bottles  of  milk  a  day  at  the  pres- 
ent. That  is  all  -put  out  at  seven  and  one-half  cents  and  eight 
cents  a  bottle.  I  did  not  hear  of  any  meeting  of  the  board  of 
dim* tors  of  the  'Consolidated  Milk  Exchange  that  was  to  con- 
sider the  advisability  of  recommending  the  raising  of  the  price 
to  the  consumer.  I  know  some  of  the  milk  dealers  held  some 
meetings  in  Williamsburg.  I  do  not  know  who  was  present. 
Those  meetings  were  called  in  reference  to  the  raising  of  the 
price  of  milk.  I  think  one  of  my  cousins  went  to  one  of  them, 
either  George  or  Samuel  Rider.  Mr.  Wierk  talked  with  me  over 
the  telephone.  He  said  he  thought  the  price  of  milk  ought  to  be 
raised  from  eight  cents  to  nine  cents  a  quart.  I  told  him  at  the 
time  I  thought  we  ought  to.  He  said  that  all  of  the  others  were 
going  to  raise  the  price  to  nine  cents.  By  "  the  others,"  I  mean 
the  Milk  Exchange.  I  don't  think  the  dealers  in  G-reenpoint 
wanted  to  raise  the  price  to  nine  cents  —  I  am  not  speaking  of 
the  little  stores,  but  I  mean  two  of  the  large  dealers  —  what  you 
might  call  our  competitors.  I  met  Mr.  Wierk  and  the  superin- 
tendent of  the  New  York  Dairy  Produce  Company,  Mr.  Cher, 


2'64  ['SENATE 

and  discussed  the  advisability  of  advancing  the  price  to  nine 
cents.  I  thought  that  it  ought  to  be  done.  I  heard  from  Mr. 
Beakes  about  this  time  and  he  thought  the  price  ought  to  be  ad- 
vanced. He  quoted  the  prices  that  we  were  paying  for  milk  and 
said  that  we  were  losing  money  and  all  that.  He  thought  that 
we  ought  to  get  together  and  raise  the  price. 

WILLIAM  E.   R<H,KRS: 

I  reside  at  44  Clifton  place,  Brooklyn.  I  have  been  in  the 
milk  business  about  twenty  years.  I  am  president  of  the  Diamond 
Dairy  Company.  Also  a  direct  or.  I  think  it  was  organized 
about  ten  years  ago  under  the  laws  of  the  State  of  New  York  with 
a  capital  stock  of  $1:M),00().  C.  A.  Wiekes  is  vice-president,  I. 
V.  Ketchnni,  treasurer,  and  II.  S.  Hanna,  secretary.  G.  H.  Nie- 
moyer,  I.  V.  Ketcliuin,  M.  F.  Rogers  and  George  C.  Rogers  are 
directors.  I  own  142  shares  of  stock  of  the  par  value  of  $100 
each.  It  is  a  close  corporation.  We  have  not  paid  any  dividends. 
I  receive  $_?">  a  week  plus  .">  per  cent,  of  the  par  value  of  the  stock 
that  I  own.  Sometimes  we  made  improvements  and  didn't  take 
out  the  5  per  cent.  We  own  three  creameries  in  the  country. 
They  are  in  Snsqnehanna  c<,unty  Pennsylvania.  We  have  one 
in  Sussex  county,  Xew  York.  We  have  some  branch  stores  in 
New  York  city,  borough  of  Brooklyn,  at  795  Seventh  avenue,  344 
Seventh  avenue,  86  Butler  street,  030  Fulton  street,  1152  Bed- 
ford avenue,  487  Nostrand  avenue  and  185  Ralph  avenue.  Our 
main  business  is  bringing  the  milk  from  the  creameries  and  selling 
it  in  the  borough  of  Brooklyn.  I  am  a  stockholder  in  the  Con- 
solidated Milk  Exchange.  I  own  five  shares  of  the  stock  person- 
ally. I  suppose  I  bought  them  ten  or  fifteen  years  ago.  I  was 
not  a  stockholder  of  the  old  Milk  Exchange.  I  am  one  of  the 
directors  of  the  Consolidated  at  present.  Have  been  for  less  than 
two  years.  I  don't  own  stock  in  Bordens,  Sheffield  or  the  Mutual 
Company.  I  was  an  employee  of  Sheffield  Farms  about  twenty 
years  ago.  We  have  done  a  little  business  with  Sheffield  Com- 
pany. We  buy  or  sell  to  them  occasionally  in  case  either  of  us  are 
short  Perhaps  about  half  the  time.  When  it  is  possible  I  at- 
tend the  meetings  of  the  board  of  directors  of  the  Consolidated. 
When  they  fix  the  value  they  consider  the  weather,  the  supply  — • 
whether  the  city  is  filled  with  milk  or  whether  there  is  a  lot  of 


No.  45.]  265 

goods  held  back  in  the  country,  also  the  butter  and  cheese  prices 
and  anything  else  that  might  tend  to  influence  the  price  or  value. 
There  are  five  shares  of  stock  still  standing  in  the  name  of  Wil- 
liam E.  Rogers  &  Company,  with  whom  the  Diamond  Dairy 
Company  consolidated  six  years  ago.  The  meetings  of  the  Con- 
solidated were  usually  held  in  Jersey  City  and  at  6  Harrison 
street.  The  Consolidated  Milk  Exchange  has  no  dealings  in  milk 
that  I  know  of.  They  consider  the  value  of  milk  and  take  up 
the  question  of  collecting  cans  and  legislation.  When  this  value 
was  placed  each  one  casts  a  ballot  as  to  what  he  thinks  the  value 
of  milk  should  be,  and  these  are  counted  and  each  one  is  asked 
for  his  reason  for  thinking  it  should  be  so  much,  and  after  this 
is  done  a  formal  ballot  is  taken  and  those  are  counted,  and  the 
value  of  milk  is  placed  in  accordance  with  the  majority  of  the 
formal  ballot  that  decided  for  any  one  figure,  and  the  chairman 
of  the  meeting  made  an  announcement  of  that  formal  ballot  as 
follows :  •  "  The  committee  finds  in  their  judgment  the  value  of 
milk  to  be  so  much  for  a  forty-quart  can,  with  the  allowances."  I 
know  the  "  Milk  Reporter  "  published  the  value.  It  was  headed 
"  Miilk  Exchange  prices."  That  gives  us  an  idea  of  how  the 
situation  is.  It  enabled  us  to  fix  our  prices  to  the  farmer.  We 
think  the  information  gathered  is  very  valuable.  It  makes  quite 
a  difference  if  there  is  plenty  of  milk  coming  in  or  if  there,  is 
plenty  back  in  the  country  or  if  butter  and  cheese  is  high,  and 
whether  it  is  dry  in  the  country  or  very  good  pasture.  When  I 
attend  these  meetings  I  go  as  much  for  the  information  that  I 
get  in  regard  to  the  situation  in  the  country  as  I  do  for  the  value 
they  place  there.  I  suppose  that  the  value  placed  on  milk  would 
influence  us  in  the  price  we  had  to  pay  to  the  farmer.  In  buying 
milk  in  the  country  I  don't  always  establish  the  price  that  cor- 
responds with  the  value  found  by  the  Exchange,  but  do  somer 
times.  The  competition  in  the  vicinity  of  my  creameries  controls 
the  price.  Some  of  the  competing  creameries  are  owned  by 
members  of  the  Exchange  and  some  are  not.  After  the  valuation 
changes  on  the  Exchange  and  we  conclude  to  change  the  price  to 
the  farmers  at  all  at  that  season,  we  do  it  then.  I  think  this 
practice  is  followed  in  the  majority  of  our  creameries.  Our 
method  of  changing  the  price  at  the  creameries  is  to  write  a 


2'66  [SENATE 

letter  to  post  up  a  card  giving  the  new  price  until  further  notice. 
We  haven't  made  any  changes  in  the  price  at  the  creameries  in  the 
last  month;  Don't  remember  when  we  did  make  any  changes  in 
the  price.  It  is  not  our  practice  to  change  the  price  to  the  farmers 
corresponding  to  the  valuation  fixed  by  the  Exchange  nor  to 
buy  milk  as  low  as  the  values  found  by  the  Consolidated  Milk 
Exchange.  We  try  to  buy  milk  as  low  as  we  can.  But  we  couldn't 
always  buy  it  at  any  figure,  it  would  depend  on  our  competition 
in  the  neighboring  creameries,  and  I  am  not  paying  now  prac- 
tically the  value  that  the  Exchange  places  on  milk.  We  are  pay- 
ing more  than  the  Exchange  price.  I  think  I  am  paying  about 
ten  or  seven  cents  a  can  more  for  the  far  off  milk  than  the  Ex- 
change valuation,  and  about  the  same  as  the  Exchange  price  for 
the  nearby  milk.  We  pay  the  farmer  $1.77  per  can,  furnish  cans, 
wash  them  and  pay  all  the  freight.  That  price  is  net  to  the 
farmer.  I  have  never  seen  the  articles  of  incorporation  of  the 
Consolidated  Milk  Exchange. 

Q.  And  the  object  then,  as  you  understand  it,  of  the  Con- 
solidated Milk  Exchange  is  to  have  a  uniform  value  placed  upon 
milk;  is  that  it?  A.  Yes,  sir. 

Q.  And  it  is  supposed  that  this  uniform  value  that  they  place 
upon  milk  will  be  generally  paid  to  the  producers  for  milk  at  the 
time  or  about  the  time  that  it  is  placed  on  it?  A.  I  don't  know. 

Q.  It  is  generally  supposed  ?  A.  I  don't  know.  We  don't  pay 
the  same  even  at  our  places.  Our  prices  differ  from  the  Exchange 
prices  at  different  times. 

Q.  But  take  the  general  average  throughout  the  year,  aren't 
they  about  the  same,  the  values  that  you  place  and  the  values 
established  by  the  Consolidated  Milk  Exchange?  Now,  I  do 
not  want  to  influence  you  into  saying  it.  I  want  to  get  the  fact, 
Mr.  Rogers.  Aren't  they  about  the  same?  I  don't  want  you 
to  say  it  to  satisfy  me,  but  I  want  to  get  the  fact.  A.  No,  sir, 
they  are  not. 

Q.  They  are  not?  A.  No,  sir.  There  was  no  method  that  I 
know  of  of  notifying  the  members  of  the  resolution  passed  by  the 
directors.  I  never  saw  any  reporters  present  at  the  meeting,  but 
they  wait  around  until  after  the  meeting.  I  think  the  reporters? 
sometimes  come  to  the  door  and  ask  the  officers  what  has  been 


No.  45.]  267 

done  and  the  officers  tell  them  whatever  value  they  have  found. 
I  know  Mr.  Stanton,  the  publisher  of  the  "  Milk  Reporter,"  and 
I  have  seen  him  at  the  meetings,  and  I  think  he  would  have  the 
privilege  of  the  room  if  he  was  there.  I  never  saw  him  but  once 
or  twice.  While  I  was  a  member  of  the  Exchange  the  price  to 
the  consumer  was  never  discussed,  and  no  regulation  as  far  as 
I  know  was  ever  established  to  bind  members  to  observe  the 
values  found  by  the  Exchange  nor  was  there  any  regulation  that 
influences  the  members  to  observe  the  values  found  by  the  Ex- 
change. The  only  thing  that  influenced  us  was  the  statements 
received  from  the  country.  That  influenced  the  directors  in  ar- 
riving at  values.  I  raised  the  price  from  eight  to  nine  .cents  for 
bottled  milk  November  4th.  My  business  is  about  half  in  bottled 
and  half  in  dipped  milk.  I  handle  about  6,000  bottles  per  day. 
About  the  same  of  dipped  milk,  and  I  advanced  it  about  one- 
half  cent  a  quart  at  the  same  time.  We  change  the  price  for 
dipped  milk  according  as  the  price  changes  to  the  farmers  in  the 
country.  I  think  our  price  for  dipped  milk  is  six  or  six  and  one- 
quarter  or  six  and  one-half  cents.  I  discussed  the  advisability 
or  necessity  of  raising  the  price  with  some  of  my  dealers  at 
different  times  and  different  places.  Any  time  that  I  might  meet 
them.  It  was  a  question  of  getting  more  money  or  some  of  us 
having  to  go  out  of  business  soon. 

Q.  Was  not  the  question  of  agreement  to  advance  the  price 
discussed  with  you  ?  A.  No,  sir.  Some  subject  might  have  been 
discussed  at  the  Consolidated  Milk  Exchange  after  the  meeting. 
I  don't  remember  that  it  was  discussed  after  a  meeting  held  in 
October,  1909,  nor  I.  don't  recall  that  I  was  present.  There  was 
no  discussion  while  I  was  there.  No  discussion  took  place  during 
the  meeting.  There  might  have  been  a  general  talk  in  a  general 
way  after  the  meeting  about  the  advisability  and  necessity  of 
raising  the  price.  I  would  not  say  that  at  the  meeting  on  the 
30th  day  of  October,  1909,  other  dealers  didn't  say  to  me  that 
they  intended  to  raise  the  price  about  November  1st.  I  have 
never  attended  any  gathering  or  meeting  at  which  it  was  gen- 
erally agreed  that  the  price  of  milk  should  be  advanced  on  or 
about  November  1st.  Several  gentlemen  called  upon  us  from 
different  newspapers  about  a  campaign  of  education,  we  are  to 


2'68  ['SENATE 

insert  a  car  in  a  paper  and  "  they  were  going  to  write  up  a 
lot  of  other  matter."  X  either  the  B  or  dens,  Sheffield  or  the  Mutual 
own  any  stock  in  the  Diamond  Dairy  Company,  and  I  am  a 
member  of  the  Mutual  Aid  Society.  I  have  never  been  an  officer 
or  director  of  the  Dairymen's  Manufacturing  Company,  and  I 
have  never  been  a  member  of  any  committee  of  the  Exchange, 
I  don't  know  that  there  is  any  committee  on  price  and  sales  in 
the  Exchange.  The  price  or  value  made  by  the  Exchange  niiaht 
to  some  degree  affect  the  price  in  the  country. 

WILLIAM  J.  ROGERS: 

I  have  resided  in  Orange,  X.  J.,  for  lift;  en  or  eighteen  years. 
Kxcept  the  former  president,  now  dead,  I  know  none  of  the  officers 
directors  or  stockholders  of  the  Sheffield  Farms  Slawson-Decker 
Company,  nor  have  I  ever  had  any  communication  with  any  officer, 
director  or  representative  of  that  company  in  any  manner,  shape 
or  form.  I  have  been  president  of  the  Horden  Condensed  Milk 
Company  since  1901.  My  company  advanced  the  price  of  bottle 
milk  from  right  cents  to  nine  cents  a  quart  about  XovrmU  r  1st. 
Except  with  Mr.  Taylor  and  one  or  two  others  of  our  company, 
I  had  no  discussion  with  anybody  else  about  the  matter  of  ad- 
vancing the  price.  I  talked  with  Mr.  Cochran,  of  our  Route  de- 
partment, and  wo  determined  to  advance  the  price  on  November 
1st.  We  took  every  precaution  that  our  intentions  should  not- 
become  known  to  others.  In  our  notice  we  gave  no  reasons  for 
the  advance,  but  simply  stated  that  until  further  notice,  "m  ilk- 
would  be  nine  cents  a  bottle."  The  object  of  the  notice  was  "  to 
give  the  customers  an  opportunity  to  change  if  they  did  not  choose 
to  pay  the  advanced  price."  I  consulted  with  no  one  except  M  r. 
Cochran  and  Mr.  Taylor  of  our  company  in  reference  to  the  ad- 
vance in  price.  We  consulted  with  no  one.  It  would  not  make 
a  particle  of  difference  what  others  did.  We  gave  the  question 
of  others  raising  the  price  no  consideration.  We  have  only  one 
price — no  graded  prices  like  some  others  have.  I  know  none  of 
the  officers  or  directors  of  the  Mutual  Milk  &  Cream  Company. 

Q.  Will  you  tell  us,  Mr.  Rogers,  how  you  make  the  prices  that 
your  company  will  pay  the  producers  for  milk  ?  A.  We  have 
a  system  of  contract.  There  are  two  periods.  That  is 
the  spring  and  winter  contract.  The  first  thing  we  do 


!STo.  45.]  260 

is  to  send  out  to  the  superintendents  a  blank  asking  them  to  re- 
port the  quantity  of  milk  they  can  buy  at  their  stations,  their 
present  dairy,  and  to  also  advise  us  as  to  what  they  can  get  in 
addition  to  their  present  dairy.  We  then  ask  their  recommenda- 
tions as  to  what  price  it  would  be  necessary  to  pay  in  order  to 
secure  that  quantity  of  milk.  That  is  the  first  move.  ISTow,  after 
a  while  we  get  those  reports  all  in  and  when  we  receive  those 
reports  then  we  get  together,  the  officers  get  together  — the  execu- 
tive  officers  —  and  discuss  the  situation.  We  study  it  not  from 
the  standpoint  of  the  loc^l  superintendent  but  from  the  broader 
iiaiiire,  .taking  the  condition  all  over  the  State  and  country.  The 
prices  of  butter,  price  of  cheese,  price  of  feed,  prices  of  various 
feeds,  whether  they  have  advanced  or  not,  and  whether  the  butter 
and  cheese  prices  were  stiffening  up.  Then  we  discuss  that  and 
conclude  what  would  be  a  fair  price  to  offer  the  dairymen  for 
their  product.  That  having  been  done,  we  send  out  a  notice  to  the 
superintendent  giving  him  the  quantity  we  allotted  to  the  various 
plants,  the  quantities  they  are  to  buy.  We  send  a  letter  to 
the  various  superintendents  giving  their  allotments,  a  certain  num- 
ber of  pounds  of  milk  each  month  in  the  six  months  at  the  follow- 
ing prices  —  at  the  prices  you  will  find  inclosed  on  a  slip  in  the 
envelope.  Instructions  are  given  not  to  open  that  envelope  until 
the  morning  of  the  contract.  That  is,  we  will  say,  the  15th  of 
September,  so  the  dairymen  themselves  will  come  in,  and  that 
is  the  day  they  receive  their  checks.  On  the  15th  of  September, 
the  superintendent  is  supposed  to  open  that  envelope  showing  the 
prices,  and  on  the  back  of  it  ;he  indorses,  "  opened  such  and  such 
n.  day  "  and  that  is  witnessed  by  one  of  the  factory  men.  So  we 
have  the  two  signatures  showing  that  the  envelope  was  not  opened 
until  the  instructions  said  to.  Then  they  paste  the  prices  up  on 
the  bulletin  showing  wrhat  the  prices  are,  so  the  farmiers  can 
come  in  and  see  what  the  prices  we  offer  are  for  six  months,  and 
it  gives  them  a  chance  to  discuss  it  among  themselves  before 
signing  it.  That  closes  that. 

(Form  of  contract  offered  in  evidence,  marked  Exhibit  No. 
1,  of  February  9th.) 

(Various  exhibits  received  showing  the  method  Bordens  employ 
in  doing  business  with  the  farmers.) 


270  [SENATE 

We  took  the  Exchange  price  into  consideration  with  other 
things  in  arriving  at  a  price  that  we  paid  for  milk.  "  Our  prices 
have  always  been  higher  than  theirs,  except  perhaps  when  there 
was  a  shortage  of  milk.'7  They  can  change  their  price  from  day 
to  day.  Ours  is  a  contract  price  for  six  months.  Their  price 
for  same  period  may  average  up,  a  but  you  see  the  conditions 
are  a  little  different.  To  give  you  an  illustration:  Especially 
in  August,  and  I  think  September,  there  was  a  great  shortage  of 
milk.  Their  prices  were  higher  than  ours  then.  We  felt  the 
shortage  as  much  as  they  did,  but  we  could  not  change  our  prices." 
At  the  present  time  their  prices  arc  considerably  lower  than  ours 
because  we  put  ours  out  so  much  in  advance.  In  October,  1908, 
we  paid  $1.70  per  40-quart  can  and  $1.90  in  October,  1909.  We 
paid  a  very  small  percentage  on  an  average  less  for  milk  in  1900 
than  we  did  in  1908.  One  dollar  and  sixty  cents  and  one-half 
per  40-quart  can  in  1909  and  $1.61  in  1908.  We  passed  no  reso- 
lution by  the  board  of  directors  when  we  advanced  the  price  on 
November  1st.  I  never  attended  a  meeting  for  the  purpose  of 
considering  the  advisability  or  necessity  of  advancing  the  price 
of  bottle  milk  with  Mr.  Loton  ITorton  or  Mr.  C.  H.  C.  Beakes. 
I  never  consulted  with  anybody  about  it, 

Q.  Nor  authorized  anybody  else  to  discuss  it  with  them? 
A.  Positively.  I  know  some  of  the  members  of  the  Consolidated 
Milk  Exchange  and  Mr.  Comfort  called  on  me  in  August  or  Sep- 
tember and  talked  with  me  about  "  the  foolishness  of  the  Exchange 
iii  putting  up  prices  to  the  producer,"  and  talked  on  the  general 
milk  business. 

Q.  Did  he  say  anything  to  you  about  the  necessity  or  advisa- 
bility of  raising  the  price  of  bottled  milk  ?  A.  Nothing  whatever. 

Q.  Didn't  he  say  the  consumers  ought  to  pay  more  for  milk? 
A.  I  think  if  he  said  anything  at  all  it  was  the  other  way;  he 
hoped  prices  would  not  go  up. 

Q.  To  the  consumer  ?    A,.  Yes. 

Q.  Is  that  the  last  time  you  saw  Comfort  ?  A.  The  only  time 
I  saw  him.  I  never  heard  of  the  Milk  Dealers'  Protective  Asso- 
ciation until  now.  We  have  a  department  that  attends  to  our 
collection  of  cans.  There  is  an  association  that  brings  our  cans 
to  us.  It  is  called  the  Can  Dealers'  Protective  Association,  I 


-No.  45.]  271 

think.  We  have  110  representative  in  the  Milk  Dealers'  Pro- 
tective Association.  We  have  about  70  or  80  stations.  We  use 
separators  or  substitutes  for  them  in  nearly  all  of  them.  Wo  use 
separators  entirely  for  filtering  milk.  By  a  separator,  from  the 
centrifugal  force,  the  cream  is  separated  from  the  milk.  We  have 
another  method  that  is  better  than  a  separator,  simply  a  filtering 
apparatus,  a  filtering  through  cotton.  We  do  not  use  separators 
for  standardizing  milk  and  have  not,  during  the  history  of  our 
company.  We  have  no  grades  of  milk.  "  Our  milk  is  precisely 
as  the  cow  gives  the  milk."  We  sometimes  give  premiums  for 
a  high  percentage  of  butter  fat.  We  do  that  to  keep  our  dairies 
from  going  to  the  butter  factories.  The  proper  way  to  buy  milk 
is  on  the  butter  fat  test.  We  give  the  premium  only  where  there 
is  competition  with  the  butter  factories.  We  never  make  butter 
except  when  forced  to  on  account  of  a  flush  of  milk.  The  more 
butter  fat  in  milk,  the  more  cream  we  get  and  from  some  of  our 
creameries,  we  ship  only  cream.  Butter  fat  runs  high  in  the 
winter  months.  We  do  not  take  into  account  what  was  made  or 
lost  in  the  previous  six  months  in  making  the  price  to  the  farmers. 
We  only  take  into  account  the  period  for  which  the  contract  is 
made.  The  figures  made  for  Mr.  Scudder  on  the  profits  for  the 
year  ending  June  30,  1909,  compared  with  June  30,  1908,  were 
mere  estimates,  showing  $170,000  more  profit  in.  1909  than  in 
1908.  There  is  no  way  of  separating  the  profits  of  buttermilk 
from  the  rest  of  the  business.  The  figures  Mr.  Scudder  got  are 
only  an  estimate,  "  a  calculation."  I  don't  think  that  our  profits 
and  losses  should  be  taken  into  account  in  arriving  at  a  price  to 
the  consumer.  We  have  to  buy  an  excess  of  milk  in  summer  to 
get  what  we  require  in  winter  and  we  have  to  manufacture  mruch 
of  the  surplus  into  butter,  on  which  there  is  frequently  a  loss  and 
the  price  to  the  consumer  does  not  fluctuate  as  does  the  price  .to 
the  farmer.  When  we  are  buying  it  cheap  of  the  farmer,  we  do 
not  sell  it  correspondingly  lower  to  the  consumer  —  there  are 
many  things  to  take  into  account  and  we  try  to  average  up  the 
year.  With  reference  to  the  $15 ,42*8,408,46  of  the  capital  stock 
issued  for  trade-marks,  patents  and  good  will,  I  would  say  that 
that  stock  was  issued  for  full  value.  We  have  to  take  into  ac- 
count the  50  years'  experience  of  the  parent  company,  the  New 


272 

York  Condensed  Milk  Company,  which  was  capitalized  at  $3,000- 
000.  All  the  tangible  assets  of  that  company  were  turned  over 
for  $4,0-70, 5 91. 5 4,  and  the  balance  was  good  will,  patents,  tradte- 
marks,  otc.  "  I  would  rather  take,  the  good  will  of  the  company 
to-day  than  all  the  assets  (tangible).7'  We  have  261  trade-marks 
throughout  the  world,  some  eighteen  pending  at  present,  and 
thirty  patents.  The  company's  name  is  known  all  over  the  world. 
In  1902,  the  company  bought  ont  the  Anglo-Swiss  Company.  It 
did  principally  a.  manufacturing  business.  They  had  over  in 
Brooklyn,  "  some  broken  down  old  teams  and  horses  and  wagons. 
I  guess  they  ran  about  twenty."  We  have  bought  no  other  com- 
panies. 

Q.  So  no  milk  is  sold  by  your  company  after  it  is  forty-eight 
hours  old  '.  A.  No;  positively,  no.  The  cream  is  not  held  over 
twenty-four  hours.  Our  concern  holds  no  cream  for  any  great 
length  of  time.  It  is  more  expensive  all  the  way  through  to 
bottle  milk  in  the  country.  There  is  the  freight  and  the  trucking 
-both  more  expensive  on  bottled  milk  —  and  another  difference 
in  the  matter  of  cost  of  bottling  in  the  city  or  country.  Our 
system  of  inspection  is  very  expensive.  We  have  seven  veteri- 
narians constantly  in  our  employ  and  an  inspector  for  each  sta- 
tion. Packing  the  boxes  of  bottle  milk  is  an  additional  expense 
and  the  four-horse  team  handles  less  than  one-half  in  bottle  milk 
than  it  can  in  forty-quart  cans.  The  principal  reason  why  we 
bottle  in  the  country  is  the  deterioration  incident  to  sending  milk 
in  bulk.  We  send  as  much  by  carload  lots  as  we  can  in  order  to 
save  12%  per  cent,  freight.  Whenever  we  learn  that  there  is  an 
epidemic,  or  a  case  of  typhoid  fever  in  the  family  of  the  pro- 
ducer, we  shut  off  that  dairy  and  pay  for  the  milk  just  the  same. 

Q.  All  your  milk  is  submitted  to  the  tubercular  test? 
A.  Physical  examination  we  depend  on  entirely.  I  do  not  be- 
lieve in  the  tubercular  test  as  applied.  I  was  a  driver  a  great 
many  years  ago  and  knew  Joe  Ferris.  I  have  seen  him  in  the 
intervening  years.  He  was  selling  goods  for  a  wholesale  liquor 
house.  When  I  met  him  some  time  ago,  in  the  course  of  conversa- 
tion, I  may  have  said  to  him,  "  You  know  there  is  no  combina- 
tion." I  would  not  repeat  what  he  said  —  "  he  said  too  much  — 
I  left  him  standing  in  the  street  talking."  There  are  no  minutes 


-No.  45.]  273 

of  our  corporations  of  meetings  held,  in  which  the  question  of  ad- 
visability or  necessity  of  raising  the  price  of  milk  was  expressed 
or  discussed.  The  telegram  sent  to  Mr.  Taylor  by  me  had  nothing 
to  do  with  the  matter  of  raising  the  price  of  milk  at  all  on  No- 
vrmber  1st.  I  never  heard  anything  about  the  campaign  of 
education  to  raise  the  price  of  milk  until  I  saw  it  in  the  news- 
papers. I  never  heard  of  Mr.  Gorman.  I  think  that  a  farmer 
carrying  on  his  business  systematically  can  produce  milk  at  a 
reasonable  profit  and  this  does  not  apply  to  the  shiftless  dairy- 
man. The  farms  have  been  abandoned  and  you  can  buy  them  for 
what  it  cost  to  build  the  buildings.  We  are  trying  to  demonstrate 
to  farmers  that  with  a  business  management  and  the  same  system 
that  we  employ  in  our  country  end  of  the  business,  they  can  make 
money.  A  man  will  remonstrate  over  paying  one  cent  advance 
in  the  price  of  milk  for  his  family  where  he  will  not  question 
the  price  charged  for  a  glass  of  wine.  When  a  farmer  brings 
his  milk  to  our  creameries,  he  knows  what  the  price  will  be  for 
six  months.  "  He  regulates  the  production  according  to  these 
prices.  If  he  has  not  got  cows  enough  in  his  dairy,  he  will  buy 
more  cows."  He  should  not  buy  cows,  he  should  raise  them  on 
his  own  farm,  and  he  should  raise  his  own  grain  and  not  pay  the 
high  prices  exacted.  A  farmer  should  keep  an  accurate  record  of 
all.  expense.  It  is  the  only  way  he  can  demonstrate  what  can  be 
done  on  a  farm.  The  farmer  has  got  to  be  educated.  Something 
has  got  to  be  done.  "  Otherwise  the  city  will  go  without  milk, 
as  we  can  show  by  records  the  falling  off  is  great  in  the  produc- 
tion of  milk  in  this  State.  That  is  the  reason  why  we  have 
to  go  250  and  300  miles  from  New  York  to  get  a  suffi- 
cient amount  of  milk."  During  the  months  of  August  and 
September,  there  is  a  great  scarcity  of  milk.  "  We  our- 
selves were  as  high  as  50,000  quants  a  day  behind  what  the 
consumer  required,  and  we  issued  instructions  to  the  superin- 
tendents to  notify  the  drivers  that  they  must  give  the  children 
in  all  cases  the  preference  where*  there  was  not  enough  to  go 
around."  The  production  of  milk  at  each  dairy  falls  off  every 
year  as  far  as  our  dairies  are  concerned,  and  we  think  that  it 
shows  up  better  in  our  case  than  in  others.  Our  farms  have 
fallen  from  one  hundred  and  forty-one  to  one  hundred  and  nine 


274:  [SENATE 

quarts  on  an  average  per  day.  This  is  due  not  only  to  the  board  of 
health  regulations  but  to  our  restrictions  —  our  sanitary  and  venti- 
lation and  other  requirements  are  rigid.  When  we  went  to  Chi- 
cago the  drinking  of  milk  had  been  abandoned.  They  were  buying 
milk  at  five  cents  or  six  cents  a  quart.  We  re-established  the 
route  system,  and  even  in  the  best  sections  it  was  hard  to  con- 
vince them  that  seven  cents  was  a  reasonable  price  for  milk. 
"Those  conditions  have  all  changed."  Milk  is  drunk  everywhere 
there  now.  Our  price  in  Chicago  is  eight  cents  a  quart.  The 
difference  in  price  between  Chicago  and  New  York  is  represented 
by  the  conditions.  "  They  farm  out  there.  Here  they  do  not  pre- 
tend to  farm.  A  dairyman  buys  his  cows,  buys  his  feed  and  he 
hires  his  labor  here.  But  there  there  are  different  conditions. 
They  raise  their  cows,  they  raise  their  feed,  and  the  result  is  that 
they  pay  less  for  milk  there."  Milk  costs  less  and  we  sell  it  for 
less.  In  Chicago,  we  only  have  to  go  about  fifty  miles ;  here  we 
go  300  miles  for  milk.  The  reason  little  milk  is  produced  near 
New  York  is  because  the  farms  have  been  turned  into  building 
lots  and  the  homes  of  gentlemen.  I  think  the  freight  rates  are 
all  right  as  they  exist  to-day.  The  proper  time  to  bring  milk  in 
is  the  night  time,  not  in  the  day  as  formerly. 

(Exhibits  received  and  description  of  inspection  made.) 
Henry  H.  Rogers  bought  stock  in  our  company  the  same  as 
any  other  investor.  I  know  no  one  connected  with  the  Standard 
Oil  Company,  except  Mr.  Tilford,  now  dead.  We  sell  about  OR 
per  cent,  of  all  the  milk  bottled  in  the  country  and  about  21  per 
cent,  of  the  entire  amount  of  milk  of  all  kinds  is  sold  in  New 
York  city.  As  to  whether  I  can  say  anything  that  would  assist 
this  inquiry,  I  have  only  to  say  that  we  are  in  a  class  by  our- 
selves. We  are  not  brought  in  touch  with  any  other  dealers  in 
any  way,  shape  or  manner.  We  have  only  one  regular  price.  We 
do  not  have,  like  some  dealers,  eight-cent,  ten-cent,  fifteen-cent, 
and  twenty-cent  milk.  The  price  is  all  the  same.  We  have  no 
competitor  in  milk  bottled  in  the  country.  T  would  not  care  to  be 
understood  that  we  have  no  competitors.  There  is  the  strongest 
kind  of  competition ;  there  is  just  as  much  difference  in  the  quality 
of  milk  as  there  is  in  almost  anything  produced. 


No.  45.]  275 

Q.  How  do  you  account  for  the  simultaneous  raise  in  price  by 
all  dealers  about  November  first?  A.  I  think  everybody  wanted 
to  put  up  the  price  of  milk.  Do  not  think  there  is  any  question 
about  that.  I  speak  from  experience,  from  the  fact  that  there  was 
the  same  thing  out  west.  We  exercised  the  same  caution  there 
the  time  we  put  up  the  price  in  1907.  We  put  the  price  there, 
and  it  is  a  strange  thing  we  did  the  same  as  we  did  in  this  case, 
aud  it  was  brought  out  there  in  the  evidence  by  the  competing 
companies  when  asked  how  they  came  to  put  up  the  price,  they 
found  that  Borden's  had  put  up  the  price  and  they  had  to  or  go 
to  the  wall.  How  they  got  the  information :  A  driver  called  in, 
and  immediately  they  got  out  a  notice,  some  of  them  in  fact  took 
our  exact  notification,  the  only  change  was  to  put  a  different  name 
at  the  bottom,  and  some  of  them  worked  Sunday  in  order  to  get 
them  out  for  Monday,  some  did  not  get  them  out  until  Tuesday. 

If  our  competitors  have  any '  system  of  keeping  accounts,  they 
kin  w  it  cost  on e-fif tli-cent  a  quart  more  in  October  to  deliver  per 
bottle  than  they  received.  We  took  and  added  that  to  our  No- 
vember cost  and  found  it  would  cost  us  .OS'63  to  deliver  bottled 
milk  in  the  month  of  November.  Now,  as  a  matter  of  fact  we 
found  it  did  cost  us  about  that.  It  cost  .0863.  It  cost  in  D&- 
i  ember  .0882  and  our  officers  took  this  into  account  and  we  ad- 
vanced the  price. 

Q.  Is  it  fair  to  conclude  that  the  other  dealers  followed  your 
price"?  A.  I  think  there  is  no  question  about  it.  I  think  some 
hesitated  to  put  up  their  price  and  some  did  not.  Quite  a  number 
did  not  put  up  their  price.  I  think  it  is  in  evidence  that  they 
did  not  put  up  the  price  because  they  thought  it  was  a  good  op- 
portunity to  steal  customers. 

Q.  Do  you  find  competition  in  nearly  all  your  stations  ? 
A.  Most  decidedly.  I  would  like  to  show  you  a  map  where  the 
plants  are  located. 

Q.  You  find  several  competitors  at  nearly  every  station  \ 
A.  Every  station,  yes,  sir.  We  think  that  farmers  prosper  under 
our  regulation. 

Q.  Would  you  say  that  practically  the  only  function  of  the 
Consolidated  Milk  Exchange  was  to  regulate  the  supply  in  the 
seasons  of  a  shortage  of  milk  ? 


276*  [SENATE 

Q.  That  is,  lower  their  price  when  milk  is  flush  and  raise  when 
milk  here  is  scarce?  A.  I  think  so.  I  really  do  not  know  much 
about  it.  I  think  the  reason  they  <-ome  together  is  for  the  purpose 
of  regulating  the  milk  question.  In  other  words,  it  is  a  sort  of  an 
association  of  milkmen,  or  the  farmers  originally  started  it  for 
the  purpose  of  the  farmers'  cud,  but  it  got  mixed  up  with  the  city 
end,  and  I  don't  know  which  controls. 

Q.  You  are  competitors  in  the  country  with  them  for  milk  > 
A.  Yes.  As  a  matter  of  opinion,  I  will  state  that  there  is  tlu- 
strongest  kind  of  rom.p(  t  iti<  n  with  the  exchange.  The  individual 
buyer  or  bottle  manufacturer,  there  is  the  strongest  kind  of  CM  im- 
pel it  inn.  When  it  comes  to  the  city,  there  is  the  strongest  kind 
of  comp<tition.  The  system  of  selling  milk  by  large  dealers  N 
such  that  it  is  up  to  ev<  ry  driver  to  get  all  the  business  he  can  get, 
and  lie  lias  his  own  story  to  them,  some  of  them  tell  stories  that 
are  not  facts.  There  is  the  strongest  kind  of  competition.  The 
system  of  standardizing  milk  on  the  basis  of  3,  S1/!-  and  4  per 
cent.,  aii-1  possibly  skimmed  milk,  would  leave  an  opportunity  for 
fraud.  It  is  a  crime  that  skimmed  milk  is  not  sold  in  Xew  York- 
city.  'No  reason  in  the  world  why  it  should  not  be  sold  as  skimme  1 
milk.  There  are  so  many  ignorant  people  that  there  will  be  op- 
portunities for  fraud  even  if  the  different  grades  were  'dearly 
marked.  I  think  that  skimmed  milk  would  l)e  a  great  blessing  to 
the  poor  in  this  city  and  there  is  no  danger  that  it  would  reduce 
the  consumption  of  full  cream  milk.  Skimmed  milk  is  the  most 
wholesome  food  in  the  world.  "  I  would  rather  feed  a  child 
skimmed  milk  than  I  would  Jersey  cream  that  was  so  excessive 
with  butter  fats,  that  it  would  upset  the  child's  stomach."  As  to 
putting  up  the  price  November  first,  I  would  say  that  in  1007,  we 
raised  the  price  in  November  to  nine  cents  a  quart.  We  had 
planned  to  put  it  up  the  first  of  November  or  about  the  first  of 
November.  Everybody  knows  if  the  price  goes  up  at  all,  that  is 
the  time  to  put  it  up.  Tic-ally  October  is  the  time  it  should  go 
up.  In  November,  I  said  to  Mr.  Taylor  "  Let  the  other  fellows 
go  ahead."  We  waited  until  November  18th  and  could  not  stand 
it  any  longer.  We  had  cur  notices  out  about  the  18th.  We  have- 
got  to  conduct  our  business  without  regard  to  anyone  elce.  The 
fact  that  they  follow  us  we  cannot  prevent. 


No.  45.]  277 

FRANCIS  B.  SANFORD,  Sto<clclioldery  Consolidated  Milk  Exchange: 
I  reside  at  Warwick,  X.  Y.  I  am  an  attorney-at-law,  was 
never  in  the  milk  business,  but  am  a  stockholder  in  the  Consoli- 
dated Milk  Exchange  with  five  shares  of  stock,  which  I  own  about 
two  years.  I  obtained  these  in  exchange  for  legal  services.  I 
think  I  have  two  shares  of  stock  in  the  Mutual  Milk  &  Cream 
Company.  I  have  no  interest  in  any  other  companies.  I  pre- 
pared the  certificate  which  was  filed  in  the  office  of  the  Secretary 
of  State  of  New  York  about  three  years  ago  for  the  Consolidated 
Milk  Exchange.  I  don't  know  whether  the  Consolidated  Milk 
Exchange  was  engaged  in  buying  or  selling  milk.  I  don't  know 
whether  there  was  any  arrangement  or  any  rule  with  reference 
to  transmitting  the  values  that  its  Board  of  Directors  arrived  as  to 
the  "  Milk  Reporter."  I  don't  know  about  any  agreement  among 
the  members  of  the  Consolidated  Milk  Exchange  previous  to  No- 
vember 1,  1909,  to  advance  the  price  of  bottled  milk  from  eight 
cents  to  nine  cents  a  quart.  The  directors  of  the  Consolidated 
Milk  Exchange  retained  me  to  get  up  this  certificate  of  authority 
to  do  business  in  the  State  of  New  York.  My  relations  were  with 
Mr.  Laemmle  and  Mr.  Beakes  and  Mr.  Wright,  I  put  in  the 
certificate,  the  paragraph,  "  That  the  business  or  object  of  said 
corporation  which  it  is  engaged  in  carrying  on  within  the  State 
of  New  York  is  the  purchase  and  sale  and  dealing  in  milk,  cream 
and  other  dairy  products,"  because  it  is  my  understanding  that 
you  have  to  put  in  the  certificate  that  it  is  or  intends  to  conduct 
business  in  order  to  get  your  permission  to  do  business,  and  when 
I  put  the  first  paragraph  in  there  I  expressed  as  nearly  as  I  was 
able  to  what  I  understood  they  were  doing  or  entitled  to  do  in 
this  State. 

THEODORE  SILBER,  Grocer: 

I  reside  at  99  East  lllth  street,  New  York.  In  the  grocery 
business  and  buy  my  milk  from  Liebermann.  Have  been  for  two 
weeks.  Before  I  bought  from  Miller  Brothers.  I  bought  from 
Miller  Brothers  about  three  months.  Before  that  I  bought  from 
the  Hamilton  Dairy  Company.  Miller  was  selling  me  milk  for 
$2.20  a  can.  Some  time  after  Miller  sold  me  milk  a  man  came 
around  to  see  me  and  gave  me  a  card,  "  Milk  Dealers'  Protective 


278  [SENATE 

Association,  021  East  12th  street,  New  York  City,  George  W. 
Blefford,  Can  'Collector."  He  told  me  he  would  give  me  milk  for 
$2.  I  didn't  stop  taking  milk  from  Miller,  but  Miller  kept  rais- 
ing the  price  and  then  I  stopped.  Finally  Liebermann  came 
around  and  asked  me  what  I  was  paying  Miller  and  I  told  him 
$2.30  and  Lieberman  said  he  would  sell  me  milk  for  $2.20. 

S.  FREDERICK  TAYLOR: 

As  to  the  way  the  price  of  milk  is  fixed  to  the  producer  by  your 
company,   would  say  that   the  preliminary    blank  is   sent   out   to 
various  superintendents  asking  them  to  report  approximately  the 
amount  of  milk  in  sight,   and  at  what  price  they  can  probably 
contract  for  that  milk.     Those  blanks  are  returned  to  the  office, 
the  results  tabulated,  and  the  accountant  submits  it  to  the  officers 
who  take  into  consideration  the  reports  from  the  various  sections 
and  the  general  situation,  and  determine  at  about  what  figure  they 
can  buy  that  milk.     Then  instructions  are  sent  out  as  outlined  and 
set  forth  in  the  exhibit  already  on  file.    I  consult  with  Mr.  Rogers. 
We  take  into  consideration  the  prices  paid  by  the  Consolidated 
Milk  Exchange  in  a  general  way.     We  are  simply  cognizant  of 
the  fact.     We  may  look  over  their  scale  of  prices  when  we  are 
fixing  our  prices  for  the  product  we  arc  buying  independent  of 
them,  without  any  relation  to  them  whatever.     The  prices  estab- 
lished by  the  Consolidated  Milk  Exchange  and  those  established 
by  our  company  compare  very  closely  on  an  average.     Ours  will 
average  higher.     We  had  a  discussion  among  the  members  of  the 
company  as  to  raising  the  price  of  milk.     We  do  not  discuss  our 
business  outside  of  the  company.    We  did  not  discuss  this  raising. 
I  never  met  Mr.  Beakes.     I  did  not  know  Mr.  Loton  Horton.     I 
have  met  Mr.  W.  B.  Conklin  of  the  Consolidated  Milk  Exchange. 
I  saw  him  six  or  seven  years  ago.     I  know  none  of  the  members 
of  the  Mutual  Milk  and  Cream  Company.     I  do  not  know  any- 
thing about  the  Milk  Dealers  Protective  Association.    I  have  seen 
separators  used  in  Borden's  creameries.     They  are  used  for  get- 
ting cream  and  sometimes  for  clarifying  milk.     It  has  never  been 
used  for  standardizing  the  milk  to  my  knowledge.     The  reason 
we  came  to  the  conclusion  to  advance  the  price  of  milk  to  nine 
cents  was  because  of  the  estimates  made  by  the  accounting  depart- 


Ko.  45.]  279 

ment,  and  knowledge  of  our  high  price  for  fluid  milk  to  the  farmer 
for  the  winter  contract.  In  the  route  department  we  sell  fluid 
milk,  cream,  cheese,  buttermilk,  and  condensed  milk,  and  butter, 
you  might  say,  although  the  latter  is  sold  at  a  loss,  practically. 
Condensed  milk  was  the  beginning  of  this  business.  We  ran 
wagons  up  to  1887  for  delivering  condensed  milk  when  we  did  not 
sell  bottled  milk  at  all  and  it  constituted  our  business.  Bottled 
milk  was  a  side  issue  and  at  the  present  it  is  from  the  profit 
standpoint.  I  do  not  know  how  long  milk  is  kept  but  from  what 
Mr.  Rogers  has  stated  I  would  say  about  thirty-six  hours.  I 
believe  a  Mr.  Gorman  came  to  me  some  time  last  winter  or  spring. 
He  had  some  kind  of  a  newspaper  scheme.  He  wanted  some 
money  out  of  the  Borden  Company.  It  was  some  write-up  busi- 
ness on  the  quality  of  milk,  etc.  He  did  not  show  me  any  agree- 
ments with  the  other  companies  'who  were  going  into  it.  I  was 
an  officer  of  the  company  in  1907  when  the  price  of  milk  was 
advanced  to  the  consumer.  We  raised  it  about  the  first  of  Novem- 
ber and  reduced  it  about  the  first  of  March.  The  lowering  was 
due  to  the  decrease  in  the  consumption,  falling  off  of  business. 
My  new  contracts  for  six  months  with  the  producers  are  usually 
made  the  15th  of  March.  At  the  time  that  we  raised  the  price  of 
bottled  milk  from  nine  to  ten  cents  was  never  discussed  or  inti- 
mated or  suggested  to  my  knowledge  by  any  one.  I  only  know 
that  there  is  no  city  in  the  United  States  that  gets  country  bottled 
for  any  less  than  ten  cents.  Chicago  is  an  exception  because 
Borden  is  operating  there.  Large  cities  usually  pay  ten  and 
twelve  cents  for  bottled  milk.  New  York  gets  a  larger  supply  of 
sanitary  bottled  milk  than  any  city  in  the  world.  Milk  'bottled 
in  the  country  is  bottled  under  more  sanitary  conditions  and  our 
handling  of  milk  is  more  or  less  in  the  open  and  the  people 
understand  this  and  demand  bottled  milk  more  than  they  used  to. 

HORACE  !S.  TUTHILL: 

I  reside  at  802  West  181st  street.  I  am  vice-president  and  a 
director  of  the  Sheffield  Farms-Slawson-Decker  Company.  I  have 
been  a  director  since  its  incorporation  and  vice-president  about 
three  years.  I  have  direct  charge  of  our  Harlem  business  where 
we  run  117  routes,  and  a  provisional  charge  over  other  places.  I 


280  [SENATE 

am  generally  in  the  main  office  in  the  afternoon.  As  to  how  we 
arrive  at  the  price  to  the  producer.,  I  would  say  that  it  depends 
on  conditions.  If  it  has  been  short  crops  this  summer,  we  infer 
feed  is  going  to  be  high  in  the  following  winter  and  we  will  have 
to  pay  liberally  to  help  the  farmer  out;  if  he  has  got  to  pay  high 
•prices  for  feed,  he  can't  make  cheap  milk.  This  is  arrived  at  by 
our  executive  board.  Our  treasurer  and  Mr.  Van  Bomel,  the 
superintendent,  generally  handle  that,  second  vice-president, 
Mr.  Halsey.  We  consult  together  very  frequently  because  it  is  an 
important  question  —  what  we  are  going  to  pay  the  farmer  to 
induce  him  to  make  enough  milk  to  see  us  through.  We  have  to 
establish  about  the  same  price  as  Bordens  if  we  are  in  a  section 
where  Borden  competition  is  felt.  We  have  got  creameries  in 
Fairmount,  and  we  come  in  contact  with  the  Huston  market,  and 
there  are  places  we  come  in  contact  with  the  Philadelphia  market, 
and  we  have  got  to  bid  up  to  get  the  goods.  It  is  a  grave  question 
to  get  enough  supply.  There  are  times  of  the  year  when  we  can't 
get  it  and  have  to  send  our  wagons  out  >hort.  Regarding  my  first 
obtaining  knowledge  that  the  Sheffield  Farms  Company  intended 
to  raise  the  price  of  household  milk  from  eight  cents  to  nine  cents 
a  quart  on  November  1,  1909,  I  would  say  that  on  Saturday  morn- 
ing, the  30th  of  October,  my  son,  who  has  charge  of  our  business 
in  the  Bronx,  had  got  to  his  office  about  half  past  seven.  I  was 
about  to  take  breakfast  and  he  called  me  up  and  told  me  that 
Bordens  were  out  with  a  circular  that  they  were  going  to  raise 
the  price  to  nine  cents  on  Monday  morning.  lie  asked  me  what 
I  was  going  to  do  and  I  said  I.  didn't  know.  When  I  got  down 
to  my  Harlem  office,  which  is  at  the  corner  of  Manhattan  street 
and  Broadway,  Mr.  Horton's  son,  one  of  his  sons  is  directly 
under  me  there,  and  it  is  his  duty  to  come  on  about  2  o'clock 
in  the  morning  to  oversee  the  loading  of  our  wagons ;  and  I  said, 
"  Chauncey,  what  is  this  ?  "  I  says,  "  I  hear  Bordens  are  out  with 
their  notice  to  raise  milk  the  first  day  of  November."  lie  says, 
u  Yes,  and  pop  has  attended  to  it  already."  I  says,  "  What  do 
you  mean  by  that  ?  "  "  Well,"  he  says,  "  I  got  notice  and  took  it 
home  to  him  and  got  him  out  of  bed  this  morning,"  - 1  am  telling 
you  very  frank  so  there  won't  be  any  misunderstanding  —  and 
boylike,  he  blurted  it  right  out.  He  says,  "  He  didn't  lose  any 


No.  45.]  281 

time.  He  told  Dan  to  get  the  printer  on  the  'phone  and  give  him 
an  order  for  100,000  notices  to  get  them  printed  to-day  so  that  we 
can  get  them  out  to-morrow."  That  is  all  there  is  about  that.  I 
have  read  a  great  deal  about  it.  But  that  is  the  facts.  Truth 
is  mighty  and  will  prevail. 

Yes,  I  discussed  with  the  members  of  my  company  the  necessity 
of  raising  the  price  of  milk  before  that  time.  We  should  not  have 
gone  up  at  all  if  Borden  hadn't  raised.  We  would  have,  probably 
stood  the  gaff  and  lost  money.  I  am  president  of  the  Mutual  Aid 
Society,  insurance  company,  to  insure  our  city  property,  and  for 
the  last  two  years  it  has  been  their  customer,  or  it  has  happened 
a  number  of  times,  we  would  meet  the  same  time  and  same  place 
that  they  would  have  an  exchange  meeting.  I  guess  the  Mutual 
always  held  their  meetings  in  the  same  room  as  the  Consolidated 
Milk  Exchange.  I  have  no  recollection  of  attending  a  meeting  of 
the  Consolidated  Milk  Exchange  in  September.  I  have  known 
C.  H.  C.  Beakes  over  40  years.  I  have  never  discussed  the  milk 
problem  with  him.  I  know  Mr.  Laemmle.  I  rarely  see  him.  I 
never  discussed  with  any  member  of  the  milk  exchange  the  ad- 
visability of  getting  the  milk  dealers  together  to  raise  the  price 
at  the  same  time.  Yes,  I  know  the  price  was  raised  from  eight 
cents  to  nine  cents  on  November  1st.  Accounting  for  the  fact 
that  they  all  raised  it  the  same  time,  I  would  say  it  had  got  to  be 
a  grave  question  —  we  have  to  make  a  living.  Where  we  used  to 
have  100  small  dealers,  there  is  not  one  to-day,  as  I  recollect  it.  I 
have  been  in  the  business  45  years  and  that  they  have  been  driven 
out  by  the  close  competition  that  there  has  been  in  the  milk  busi- 
ness. Now,  go  back  101  or  12  years.  The  papers  h^ve  a  way  of 
.getting  everything  so  mixed  —  I  haven't  seen  a  staiement  that 
they  gave  out  intelligently  describing  the  situation.  We  are 
paying  the  farmers  over  a  cent  a  quart  more  than  we  did  12  years 
ago.  We  have  not  raised  the  price  of  bottle  milk.  We  are  paying 
100  per  cent,  more  for  the  horses.  Eight  years  ago  this  winter, 
we  bought  oats  for  twenty-eight  cents  a  bushel,  and  a  year  ago 
this  winter,  we  paid  nothing  less  than  fifty-six  cents  and  from 
that  to  sixty-five  cents,  and  so  it  is  with  everything.  We  have 
raised  our  salaries  33  per  cent,  or  34  per  cent.  We  sell  butter, 
cheese,  eggs,  etc.  We  have  forty-two  stores.  All  food  commodities 


282  [SENATE 

have  increased  over  50  per  cent,  and  because  we  start  to  increase 
12%  per  cent. —  I  cannot  understand  it.  All  the  necessities  of 
life  have  increased  over  50  per  cent,  by  Bradstreet's  reports. 
Bordens  have  been  filling  up  on  us  for  ten  or  twelve  years.  We 
have  stood  it  until  it  was  back-breaking.  There  had  to  be  some- 
thing done.  We  could  never  go  through  this  winter.  I  don't  mean 
to  be  predicting,  but  my  judgment  is  that  the  time  of  eight-cent 
milk  in  the  winter  time  in  New  York,  as  long  as  we  have  the  re- 
strictions that  we  have  to-day  and  the  cost  of  production  and 
everything,  is  past.  I  say  that  after  forty-five  years  in  the  milk 
business. 

CHRIS  VAGHTS: 

I  reside  at  405A  McDonough  street,  Brooklyn.  I  am  in  the 
milk  business  about  33  years.  I  have  no  place  of  business  in  the 
city.  I  ship  it  to  my  places  in  the  country.  They  are  at  West 
Winfield,  Herkimer  county;  one  in  Schuyler  Jnnclinn;  OIK-  in 
Marcy;  one  in  Adler  Creek;  one  in  Denley;  one  in  Deer  River; 
one  in  Sterlingville;  one  in  Philadelphia,  New  York.  I  sell  the 
milk  that  I  collect  at  these  various  stations  to  wholesalers  in  New 
York  City.  I  am  a  stockholder  in  the  Consolidated  Milk  Ex- 
change Limited.  I  had  five  shares  in  that  and  held  five  in  the 
Consolidated.  At  the  time  the  Milk  Exchange  Limited  was  dis- 
solved, they  simply  transferred  the  old  shares  from  the  old  to  the 
new.  I  think  it  was  five  years  ago.  I  have  been  a  stockholder  in 
the  Dairymen  Manufacturing  Company.  I  have  never  been  a 
director  or  officer  of  the  Consolidated  Milk  Exchange.  I  think 
I  attended  one  meeting  of  the  stockholders  or  directors  when  they 
elected  officers  in  New  Jersey.  I  find  out  the  prices  that  were 
established  by  the  directors  of  the  Consolidated  through  the  "  Milk 
Reporter."  I  have  been  a  subscriber  for" ten  years.  I  receive  postal 
cards  from  them.  I  get  them  in  the  middle  of  the  month.  If  the 
price  changes  I  buy  some  of  my  milk  on  the  exchange  price  and 
some  on  Bordens,  about  half  and  half.  From  two  places  I  buy 
ten  cents  off  from  Bordens  and  in  one  place  I  pay  full  Borden 
prices.  At  those  two  places  the  milk  is  not  so  good.  I  do  not 
know  of  any  rules  or  regulations  of  the  Consolidated  that  binds 
the  members  to  buy  at  exchange  price.  I  do  not  know  of  any  pen- 


No.  45.]  283 

alty  attached  to  it.  I  do  not  know  whether  the  exchange  have 
fixed  prices  or  attempts  to  fix  prices  that  should  be  charged  by 
dealers  to  consumers.  At  about  six  of  my  places  I  pay  the 
exchange  prices  and  three  Bordens.  When  I  receive  my  milk 
from  the  farmer  I  cool  it  off  and  when  it  is  time  to  ship  I  put 
it  on  the  train,  and  when  it  gets  down  to  the  depot  the  consumer 
takes  it.  I  do  not  have  anything  to  do  with  this  end.  I  ship  in 
cans  altogether  except  a  few  boxes.  I  ship  on  the  average  of  450 
cans  of  milk  per  day  and  abut  30  boxes  on  an  average.  I  sell  to 
twelve  or  thirteen  different  dealers.  When  I  sell  to  the  dealers  in 
New  York  City  I  charge  so  much  a  can  above  exchange  price. 
My  agreements  with  them  are  oral.  The  agreement  is  not  always 
made  at  so  much  above  exchange  price.  It  depends  upon  what 
we  have  to  pay.  I  use  the  Exchange  prices  as  a  standard  on 
which  I  base  prices  when  purchasing  or  selling.  I  heard  that 
prices  of  bottled  milk  was  advanced  from  eight  to  nine  cents  oil 
November  1st.  I  did  not  know  of  any  agreement  with  the  dealers 
as  to  the  raising  of  the  price.  I  never  was  on  any  committee  of 
the  Consolidated  Milk  Exchange.  I  never  produced  milk  in  this 
country.  I  did  in  the  old  country,  Germany.  The  amount  that 
I  obtained  from  dealers  in  ISTew  York  City  above  the  Exchange 
price  averages  about  fifteen  cents  per  can.  I  do  not  belong  to 
the  Milk  Dealers'  Protective  Association.  I  do  not  use  the  sepa- 
rator in  my  cream.  I  make  all  full  cream  cheese  when  I  have 
to  separate  the  milk.  That  is  for  the  surplus  milk. 

CHARLES  VANHOF,  JK.  : 

I  am  superintendent  of  the  Retail  Department  of  the  Mutual 
Milk  and  Cream  Company  and  have  been  employed  in  that 
capacity  since  the  middle  of  August,  1909.  I  was  treasurer  and 
secretary  prior  to  that  time.  For  about  four  or  five  years.  Also 
a  director.  I  was  in  favor  of  raising  the  price  from  eight  cents 
to  nine,  cents  for  bottled  milk  on  November  1,  1909.  If  I  said 
at  any  previous  time  that  I  would  like  to  see  milk  remain  at  eight 
cents,  it  was  because  I  was  just  newly  made  superintendent  and 
my  routes  and  everything  were  in  good  condition  so  as  to  be  able 
to  sell  more  milk  off  the  wagons,  and  my  ambition  was  to  get  as 
many  customers  on  one  wagon  to  be  served  on  that  route  as  pos- 


284  [SENATE 

sible.  I  might  have  said  that,  but  I  had  no  reason  to  object  to 
the  President.  He  ordered  me  to  do  it.  I  know  something  a'bout 
an  agreement  between  the  .Mutual  Milk  and  Cream  Company, 
Sheffields  and  Bordens  to  raise  .the  price  of  milk  at  that  time,  and 
never  expressed  the  opinion  that  I  knew  that  there  was  such  an 
agreement. 

ISAAC   A.   VAX    UO.MKI.: 

I  am  in  what  they  call  the  Milk  Department  of  Sheffield  Farms- 
Slawson-Decker  Company.  I  am  a  director,  and  have  been  such 
since  1902,  excepting  when  I  was  out  of  the  business  for  one  year. 
I  have  never  been  an  officer  of  the  company.  I  would  say  that  T 
have  had  something  to  do  with  fixing  a  price  that  my  company 
pays  to  the  producers  of  milk.  We  generally  talk  over  this  matter 
of  prices  for  six  months,  that  is  what  we  think  we  can  pay  in 
different  localities,  taking  into  consideration  the  conditions  as 
they  exist;  that  is,  the  co-operative  creameries,  and  the  butter  fac- 
tories which  are  in  opposition  to  us.  I  am  one  of  those  who  decide 
on  the  price-.  I  have  particular  charge  of  the  creamers  of  the 
country.  We  only  have  one  creamery  at  present  in  which  the  Con- 
soldiated  Milk  Exchange  price  is  in  vogue.  We  have  Borden  in 
competition,  I  should  judge,  in  more  than  half  of  our  creameries 
-I  should  say,  75  per  cent,  of  them.  Only  twice  in  our  exist- 
ence, have  we  charged  any  other  price  than  eight  cents  per  quart, 
for  ordinary  household  milk;  that  was  in  11)07  and  in  190!),  and 
on  both  of  these  occasions  we  raised  the  price  to  nine  cents.  Pre- 
vious to  November  1,  1909,  we  talked  over  the  necessity  or  ad- 
visability of  raising  the  price  of  this  ordinary  milk.  We  had  all 
made  up  our  minds  that  if  we  paid  our  bills  through  the  winter, 
we  would  have  to  get  nine  cents  a  quart.  These  conversations  took 
place  during  the  months  of  'September  and  October,  1909.  We 
didn't  make  any  effort  to  talk  to  or  have  any  communication  with 
any  other  dealers  in  milk  for  the  purpose  of  combining  with  them 
in  the  raise  of  price.  Concerning  the  circumstances  connected 
with  the  raising  of  the  price  on  November  1st,  we  had  talked  it 
over  from  time  to  time  and  we  talked  of  going  up  the  1st  of 
October.  As  I  remember,  Mr.  Horton  and  some  of  our  other 
people  thought  we  had  better  do  it  then,  and  Mr.  Horton  was  going 


No.  45.]  285 

West,  and  I  went  with  him,  and  I  think  the  remark  was  made  that 
we  would  wait  until  the  conditions  out  there  were  looked  over  with 
ucher  dealers  to  see  if  we  could  learn  anything  in  our  travel  out 
there  as  to  whether  we  could  curtail  any  expenses  whereby  we 
could  cut  off  anything.  This  meeting  was  held  in  Milwaukee. 
At  that  time,  I  didn't  have  any  conversation  with  him  —  I  didn't 
have  any  conversation  about  the  contemplated  raise  in  the  price. 
The  first  I  knew  that  my  company  had  raised  the  price  of  bottle 
milk  was  when  I  arrived  at  the  office  on  the  28th  or  29th  of 
October.  I  was  informed  at  that  time  that  Borden  had  raised  the 
price.  I  had  no  idea  before  that  Borden  was  going  to  raise.  The 
last  time  I  saw  Mr.  Cochran  preceding  November  1,  1909,  was  at 
Albany.  At  that  time  I  had  no  discussion  with  him  about  the 
necessity  or  advisability  of  raising  the  price  of  bottle  milk.  I 
know  all  the  officers  and  directors  of  the  Mutual  Milk  &  Cream 
Company.  I  have  no  recollection  of  talking  with  any  of  these 
gentlemen  previous  to  November  1,  1909,  in  regard  to  the  raise  in 
the  price  of  bottle  milk  to  consumers  on  November  1st.  I  saw 
Mr.  Kavanaugh  previous  to  November  1st,  I  think,  the  latter 
part  of  October.  I  called  in  there  one-  day  in  regard  to  the  matter 
of  poisoned  horses  and  if  I  remember  right,  Mr.  Kavanaugh 
brought  up  the  subject  and  asked  me  what  we  were  going  to  charge 
for  milk  this  winter,  and  couldn't  see  how  it  could  be  sold  for 
eight  cents,  paying  the  prices  that  we  were.  I  agreed  with  him. 
That  was  all  the  conversation.  No  agreement  was  made  between 
us  in  reference  to  raising  the  price.  I  think  our  notices  were  not 
brought  out  until  after  Borden.  The  raising  in  the  price  of  milk 
was  a  general  topic  of  conversation  previous  to  November  1st. 
Whenever  I  met  any  of  the  members  of  the  Consolidated,  that  I 
know,  we  usually  talked  about  the  advisability  of  it.  We  always 
had  our  eye  on  Borden  to  see  what  the  opposition  was  going  to  do. 
There  was  no  agreement  in  reference  to  raising  the  price  between 
our  company  and  Bordens.  The  Consolidated  Milk  Exchange  are 
not  dealers  in  milk.  They  are  not  in  competition  with  us.  I  never 
attended  any  meetings  of  the  Consolidated.  I  was  at  6  Harrison 
street,  attending  a  meeting  of  the  Creamerymen's  Mutual  Aid 
Society  either  in  September  or  October;  that  is  the  only  time  I 
was  ever  in  the  Exchange  room.  The  Exchange  meeting  came  on 


286  [SENATE 

right  after  that  and  I  stayed  to  that  meeting.  I  did  not  hear  them 
discuss  the  advisability  or  necessity  of  advancing  the  price  of 
bottle  milk.  I  presume,  they  were  fixing  the  price  of  milk,  or  the 
value,  as  they  call  it,-  at  that  meeting.  I  know  the  value  was  fixed 
that  day  probably  that  I  was  there,  but  I  can't  tell  now  what  it 
was.  I  never  heard  of  the  Milk  Dealers'  Protective  Association; 
I  have  never  been  to  any  meetings.  The  Sheffield  Farms  is  not 
represented  at  those  meetings  to  my  knowledge.  We  use  separators 
in  some  of  our  creameries,  but  not  for  the  purpose  of  standard- 
izing milk.  We  use  them  for  separating  cream  from  the  milk 
when  we  want  to  sell  the  cream.  We  make  the  skimmed  milk  into 
caseine,  milk  sugar  and  milk  powder..  We  do  not  make  condensed 
milk.  Gorman  never  approached  me  in  reference  to  the  campaign 
of  education.  I  think  I  heard  it  spoken  of  before  I  saw  it  in  the 
newspapers.  I  heard  some  one  remark  what  a  fakir  this  fellow 
was.  I  know  Will  Sheffield;  he  is  our  manager  on  the  Ulster  & 
Delaware  road.  After  this  investigation  started,  and  at  the  lime 
the  letter  was  written  to  Will  Sheffield,  saying,  "  The  market: 
seems  to  have  flushed  up  quite  a  little  in  the  past  few  days.  Am 
sorry  to  have  seen  it,  as  I  would  have  liked  to  have  seen  it  keep 
short  during  this  investigation.  I  do  not  know  what  this  is  going 
to  amount  to.  We  have  not  been  called  on  yet,  but  expect  to  be. 
If  they  will  only  treat  the  matter  fairly  and  publish  the  facts,  1 
think  it  will  turn  out  to  be  a  good  thing  for  the  business,  as  we 
have  never  been  able  to  get  the  facts  before  the  people,"  our  com- 
pany was  paying  some  $15,000  or  $20,000  more  a  month  to 
farmers  that  produced  our  milk  than  dealers  who  were  in  position 
to  take  advantage  of  the  temporary  flush  in  the  market  caused  by 
the  investigation.  Our  contracts  were  made  six  months  in  advanee 
and  we  had  to  pay  that  price;  that  is  what  I  referred  to  when  I 
said  "  I  was  sorry  to  see  the  market  short  during  the  investiga- 
tion.^ The  flush  meant  an  additional  opportunity  to  the  dealer 
who  had  not  fixed  the  prices,  to  lower  the  price  to  the  purchaser. 
In  my  judgment,  I  should  say  that  half  of  the  milk  which  comes 
into  New  York  City  is  sold  by  the  dealers  in  40-quart  cans  and  the 
other  half  in  quart  bottles.  I  should  say  that  about  10  per  cent, 
of  the  milk  that  I  bring  into  New  York  has  been  sold  as  dip  milk 
and  90'  per  cent,  sold  as  bottle  milk.  The  milk  which  I  sell  as 


No.  45.]  287 

dip  milk  is  about  the  same  quality  as  that  which  I  sell  in  bottles, 
but  it  will  probably  not  test  quite  as  high;  otherwise  it  is  the  same 
quality.  We  sell  our  highly  tested,  perfectly  pasteurized  milk  at 
ten  cents  a  bottle.  We  did  not  raise  the  price  of  dip  milk  at  the 
same  time  we  raised  the  price  of  bottle  milk.  We  still  hold  that 
at  six  cents.  I  think  in  the  summer  we  sold  dip  milk  for  five  cents 
a  quart.  Our  salaries  were  higher  this  year  than  in  1908.  There 
was  also  an  advance  in  the  cost  of  delivery  with  our  firm.  The 
advance  to  drivers  was  about  $1  a  week. 

JOHN  P.  WIERCK: 

I  reside  at  908  Bushwick  avenue,  Brooklyn.  I  am  in  the  dairy 
business.  Under  the  name  of  a  corporation.  The  name  of  the 
corporation  is  the  Empire  State  Dairy  Company.  New  York  cor- 
poration, capital  stock  $350,000.  Organized  1895  or  1896.  I  am 
president  of  the  company;  Charles  Neidner,  secretary  and  treas- 
urer. We  had  a  vice-president,  I.  E.  Jordan,  but  he  died  in  the 
summer.  C.  H.  Wohlers  and  Cornehlsen  are  also  directors.  I 
hold  about  one-third  of  the  capital  stock  of  the  company.  There 
are  other  stockholders  but  I  cannot  name  them  without  referring 
to  the  book.  The  office  of  the  corporation  is  502  Broadway,  Brook- 
lyn. We  increased  our  capital  stock  because  we  had  to  have  more 
money.  We  bought  up  other  milk  companies.  That  is  eight  or 
nine  years  ago.  One  of  them  was  the  Nassau  Dairy  Company. 
Lately  we  bought  P.  G.  Bangs  Company,  about  two  months  ago. 
The  rest  are  small  ones,  I  don't  remember  the  names.  We  have  a 
branch  office  in  735  Carroll  street,  and  one  in  Flushing.  I  have  n 
creamery  in  Huntington  county,  New  Jersey,  Pittstown.  I  have 
one  in  Susquehanna  county,  Pa.  I  have  two  in  Madison  county. 
Poolville  and  Hubbardville.  One  at  East  Meredith,  Delaware 
county;  three  in  Sullivan  county,  Liberty,  Stevensville  and  White 
Sulphur  'Springs;  one  in  Chenango  county;  one  in  Windsor, 
Broome  county;  one  af  Dolgeville;  in  Ingham,  Herkimer  county; 
in  Otsego  county  at  Boomville,  and  the  other  at  Lacona.  That  is 
all.  I  was  a  member  and  stockholder  of  the  Old  Milk  Exchange 
Limited.  I  don't  remember  how  many  shares  of  stock  I  had.  I 
own  25  shares  of  stock  in  the  Consolidated  Milk  Exchange.  I 
am  a  director  in  the  Consolidated  Milk  Exchange.  I  became  a 


283  [SENATE 

director  upon  the  incorporation  and  have  been  such  with  the 
exception  of  two  OF  three  years.  I  am  not  an  officer  or  director  or 
stockholder  in  Bordens  Condensed  Milk  Company,  Sheffield 
Farms-Slawson-Decker  Company  or  the  Mutual  Milk  and  Cream 
Company.  I  am  president  of  the  Xew  York  Dairy  Product  Com- 
pany with  offices  at  155  Freeman  street,  Brooklyn.  That  is  a 
separate  company.  I  have  attended  meetings  of  the  Consolidated 
Milk  Exchange  in  New  Jersey  and  No.  G  Harrison  street.  Before 
the  Milk  Exchange  Limited  was  dissolved  we  had  meetings  at  -2 '2 
North  Moore  street.  The  Consolidated  Milk  Exchange  has  never 
dealt  in  milk,  that  is,  bought  and  sold  milk  since  its  incorporation. 
The  object  of  the  Consolidated  Milk  Exchange,  so  far  as  I  know, 
is  to  determine  the  valuation  of  milk.  The  old  Milk  Exchange 
Limited,  we  did  business  and  made  practice  for  the  business  we* 
did,  and  a  new  one  is  simply  revalued,  the  price  of  milk  from 
time  to  time,  and  in  the  old  Milk  Exchange  Limited 
we  fixed  the  price  of  milk,  using  the  word  price,  and  in 
price,  and  in  the  Consolidated  Milk  Exchange  we  used  the  word 
value ;  that  was  the  difference.  I  signed  the  certificate  of  incor- 
poration but  I  don't  know  the  meaning  of  the  words  in  it,  "  to 
promote  uniformity  and  certainty  in  the  customs  and  usages  of  the 
trade/'  (This  answer  after  strong  objections  on  the  part  of  Mr. 
Ely  as  to  what  witness  understands  that  section  of  the  certificate 
of  incorporation  to  mean.)  At  the  meetings  of  the  board  of 
directors  at  which  we  placed  a  valuation  on  milk,  different  items 
were  taken  up,  the  valuation  of  milk,  cans,  and  Albany  business 
and  what  else  I  don't  know,  just  what  all  different  things.  The 
valuations  were  talked  over  and  then  it  was  voted  on.  The  use  of 
the  valuation  was  for  me  to  know  the  condition  of  the  market.  I 
didn't  make  very  much  use  of  this  valuation  that  the  Milk  Ex- 
change placed  on  milk.  If  the  farmer  wanted  to  sell  to  me  at  that 
valuation  I  would  buy  his  milk.  I  don't  know  how  many  farmers 
sold  to  me.  I  bought  about  one-third  of  the  milk  at  that  price.  I 
bought  in  all  about  1,400  cans  and  about  one-third  of  them  were 
on  the  exchange  price.  I  have  a  written  contract  with  the  pro- 
ducer. Most  for  six  months,  some  for  a  year.  Some  of  the 
farmers  we  make  contracts  with  mention  Bordens  or  the  exchange 
price  and  state  that  they  will  take  so  much  above  or  so  much 


No.   45.]  289 

below,  depending  upon  either  Bordens  or  the  exchange  price. 
(Contract  with  patrons  of  Dolgeville  Creamery  received  in  evi- 
dence and  marked  4-H.)  The  Consolidated  Milk  Exchange  have 
no  six  months  price  ahead.  We  simply  take  the  Bordens  price  as 
some  guide.  We  don't  pay  exactly  Bordens  prices  there.  (Con- 
tract to  the  patrons  of  Ingham  Mills  Creamery  received  in  evi- 
dence and  marked  Exhibit  4-1.)  (Agreement  between  the  pro- 
ducer and  the  Empire  State  Dairy  Company  received  in  evidence 
and  marked  Exhibit  4-J.)  In  which  prices  for  six  months  are 
stated.  (Agreement  between  the  Empire  State  Dairy  Company 
to  deliver  milk  at  East  Meredith,  N.  Y.;  received  in  evidence  and 
marked  Exhibit  4-K.)  Prices  stated  for  six  months  therein.  The 
amount  that  we  pay  at  these  creameries  is  the  amount  that  the 
exchange  fixes  its  valuation  for  milk.  They  tack  this  up  on  the 
outside  of  the  creamery.  Perhaps,  we  pay  exchange  prices  at  five 
of  these  creameries.  One  at  Springville,  one  at  Pittstown  and 
three  in  Sullivan  county.  We  take  it  at  those  five  because  the 
farmers  want  the  price  that  is  fixed  by  the  exchange.  The  others 
don't  want  any  standard  established  of  any  kind,  but  want  to  go 
into  the  open  market  and  deal  with  us  independently,  that  is,  they 
want  a  six  months'  contract;  they  want  a  fixed  price  for  six 
months  ahead.  That  is  what  they  want.  I  am  a  subscriber  of  the 
Milk  Reporter.  I  saw  the  valuation  as  fixed  by  the  exchange  in 
the  Milk  Reporter,  also  by  talking  with  other  members.  Yes,  I 
regarded  it  as  important  matter  to  know  the  valuation  the  direc- 
tors of  the  exchange  had  placed  on  milk.  Yes,  we  were  particular 
that  we  know  at  some  time  in  order  to  tell  what  price  we  are 
paying  to  the  farmers.  I  know  that  the  newspapers  published  it. 
T  attended  all  the  meetings  and  this  valuation  that  was  arrived  at 
by  the  board  of  directors  was  really  an  important  matter.  I  don't 
know  whether  there  was  any  general  agreement  among  the  mem- 
bers of  the  Consolidated  Milk  Exchange  to  pay  the  price  tha-;  was 
established  by  the  board  of  directors.  I  don't  know  whether  the 
l>oard  of  directors  of  the  Consolidated  Milk  Exchange  ever  fixed 
the  prices  to  be  charged  by  the  dealers  to  the  consumers.  They 
did  not  fix  the  price  the  dealers  were  to  charge  the  consumers 
shortly  before  November  1,  1909.  I  never  discussed  the  matter 
10 


290  [SENATE 

with  any  one  before  the  raising  of  price  on  November  1,  1909.  I 
raised  the  price  on  bottle  milk  to  the  consumer  from  eight  cent? 
to  nine  cents  a  quart  a  few  days  after  November  1,  1909.  We 
couldn't  afford  to  sell  at  eight  cents.  I  get  12  per  cent,  or  121/-> 
per  cent,  rebate  for  sending  carload  lots  of  milk.  It  has  been  re- 
duced lately  from  20  to  12]/2.  I  sell  bottled  milk  to  stores  at 
present  at  eight  cents  a  quart.  I  sell  about  22,0-00  bottles  of  milk  a 
day  on  an  average.  I  sell  400  or  500  cans  of  dipped  milk  in  a 
day.  At  the  present  time  I  manufacture  about  125  cans  into 
butter  and  cheese,  and  I  manufacture  because  at  the  present  time 
the  market  is  so  flushed  with  milk.  The  market  is  usually  flushed 
after  New  Years.  It  costs  us  8.26  cents  per  bottle  from  the  time 
we  take  it  until  we  have  it  delivered.  The  cost  of  handling  milk 
alone,  excluding  the  purchase  price,  is  4.02  cents.  At  the  pres- 
ent time  the  cost  of  milk  is  4.24  cents  a  quart,  the 
express  is  .05  cents,  the  cartage  from  Jersey  City  is  .025  cents,  the 
freight  is  .08  cents,  the  city  delivery  is  .0162  cents,  and  the  pas- 
teurizing is  .045  cents ;  and  then  the  wear  and  tear  on  horses  and 
harness,  insurance,  rental,  depreciation  on  machinery,  clerk,  help 
not  included  in  the  above  figures,  or  interest  on  investment. 
(Statement  received  in  evidence  and  marked  Exhibit  4-L.)  Some 
of  my  milk  cost  five  cents  a  quart,  that  is  bought  on  butter  fat 
test.  The  premium  is  paid  above  the  5  per  cent,  at  only  one 
creamery.  About  one-third  of  our  milk  is  bottled.  The  milk  we 
sell  as  dipped  milk,  I  guess  we  get  about  six  cents  a  quart  from 
dealers.  We  sell  some  dipped  milk  over  the  counter.  We  sell  it 
for  seven  cents.  I  don't  think  we  have  one  carload  a  week  coming 
in  now  for  which  we  get  the  rebate.  At  the  persent  time  out 
wagons  sell  on  an  average  of  about  200  quarts  apiece.  It  is  a 
proper  estimate  that  a  wagon  must  deliver  at  least  200  bottles  a 
day  or  the  dealer  will  lose  money.  I  am  a  member  of  the 
Creamerymen's  Mutual  Aid  Society.  That  is  an  insurance  asso- 
ciation and  provides  for  the  insurance  on  the  creameries  of  the 
members  of  that  co-operative  partnership.  There  is  also  a  co- 
operative insurance  system  which  provides  for  insurance  of  its 
members  upon  the  horses  and  wagons  that  the  members  own.  I 
am  a  member  of  both  of  these  societies.  One  of  these  is  the 
Creamerymen's  Mutual  and  I  think  the  other  is  the  Aid  'Society. 


No.  45.]  291 

I  am  vice-president  of  the  Dairymen's  Manufacturing  Company. 
I  own  five  shares  of  the  stock  and  am  not  able  to  say  how  many 
shares  my  company  owns.  I  was  a  member  of  a  committee  on 
January  21,  1906,  to  look  after  legislation  in  Albany.  The  ex- 
penses of  that  committee  were  paid  by  the  milk  exchange. 
(Minute  book  introduced  showing  there  was  a  price  and  sales 
committee  reporting  on  values.)  I  don't  know  whether  there  was 
a  price  and  sales  -committee  or  not.  I  never  heard  of  a  price  com- 
mittee. If  there  is  such  a  resolution  there  I  can't  remember  how 
it  got  there.  I  don't  know  whether  a  resolution  was  ever  passed 
by  the  board  of  directors  authorizing  or  appointing  the  Milk  Re- 
porter the  official  organization  of  the  Consolidated  Milk  Exchange 
to  publish  the  prices  or  values  arrived  at  by  the  Consolidated  Milk 
Exchange.  I  don't  know  what  became  of  the  minutes  of  the. 
meetings  held  before  January  9,  1906.  I  never  saw  them.  A 
man  by  the  name  of  Walsh  in  Bedford  avenue  collects  our  cans.  I 
don't  belong  to  the  Milk  Dealers'  Protective  Association.  A  man 
by  the  name  of  Schaus  in  New  York  also  collects  our  cans.  We 
pay  him  so  much  a  can,  but  Walsh  by  the  year.  There  is  a  re- 
quirement of  the  Board  of  Health  authorities  in  Brooklyn  that  re- 
quires us  to  pasteurize  milk.  Our  milk  will  not  keep  any  longer 
than  any  other  if  you  don't  take  care  of  it.  (A  statement  pur- 
porting to  show  the  prices  per  quart  paid  by  Wierck  during  the 
years  1907,  1908  and  1909  received  in  evidence  and  marked 
Exhibit  4-M.)  (Statement  showing  stockholders  of  Empire  State 
Dairy  Company  received  in  evidence  and  marked  Exhibit  4-N.) 
Milk  reaches  the  lowest  price  to  the  farmer  generally  in  June. 
Some  of  our  cream  we  put  on  ice  and  keep  it  and  sell  it  at  a  later 
day,  but  never  keep  it  longer  than  a  week.  About  a  week,  it 
might  be  a  few  days  more. 

WILLIAM  ALEXANDER  WEIGHT  : 

I  reside  at  69  Lefferts  Place,  Brooklyn.  I  am  in  the  Finance 
Department  here  in  the  city.  I  was  in  the  milk  business  for  forty 
years  previous  to  August,  1907.  In  the  country  I  was  in  the  busi- 
ness individually.  I  had  stations  in  the  country,  but  in  the  city  I 
was  in  the  Syphon  Milk  Company,  a  corporation,  of  which  I  was 
president.  I  am  a  stockholder  in  the  Consolidated  Milk  Exchange. 


292  [SENATE 

owning  thirty  shares.  I  was  also  a  stockholder  in  the  Milk  Ex- 
change, Limited,  and  president  of  it.  I  am  not  an  officer  of  the 
Consolidated  nor  a  director.  I  was  president  of  the  Consolidated 
for  a  number  of  years  as  well  as  director.  It  was  the  duty  of  the 
members  of  the  price  and  sales  committee  to  find  out  what  they 
thought  the  value  of  milk.  They  would  try  to  find  out  what  the 
article  was  worth,  whether  the  hay  crop  was  good,  or  anything  of 
that  sort,  and  what  in  their  judgment  would  be  a  right  price  to 
pay  for  milk,  and  this  matter  would  come  up  before  the  board  of 
directors  and  a  resolution  would  be  passed  by  the  board  of  direc- 
tors stating  what,  in  the  judgment  of  the  directors,  was  the  value 
of  milk.  The  milk  business  was  different  then  than  now.  We 
used  to  do  a  sort  of  commission  business,  buying  milk  from  the 
dairies,  and  I  used  to  use  the  price  which  the  old  exchange  fixed 
as  a  guide  in  paying  for  the  milk,  but  after  the  conditions  changed 
and  they  got  creameries  and  so  on,  it  was  not  of  much  use.  I  am 
interested  in  the  Dairymen's  .Manufacturing  Company.  The  Con- 
solidated kept  minutes  from  the  year  181)."),  when  it  was  organ- 
ized,  down  to  1900.  I  have  seen  that  book.  I  do  not  know  where 
it  is  now.  Mr.  Laommle  was  the  last  secretary.  He  kept  the 
minutes.  I  think  we  had  a  stock  book  and  a  stock  ledger.  I  pre- 
sume Mr.  Laemmlc  was  the  custodian  of  them.  I  know  occasion- 
ally we  used  to  in  the  exchange  of  stock  or  a  retransfer  of  stock, 
he  would  have  that  book  in  the  room  and  he  would  bring  it  for  to 
sign;  I  would  sign  checks.  Sometimes  he  would  come  over  to 
niv  place  and  have  me  sign  checks,  and  he  would  bring  the  book 
with  him.  We  were  supposed  to  communicate  the  results  of  our 
meetings  to  the  members,  so  that  they  would  know  the  price  or 
value  fixed  by  the  resolution  of  the  board.  I  know  some  of  the 
dairies,  the  Alex.  Campbell  Milk  Company,  the  Diamond  Dairy, 
etc.,  knowing  that  there  would  be  a  meeting  the  last  Wednesday 
of  the  month,  would  call  me  up  and  ask,  "  Was  there  anything 
said  about  the  price  to-day,  Mr.  Wright  ? "  I  would  answer, 
"  Yes,"  or  "  No,"  as  the  case  might  be.  We  never  sent  out  any 
prices.  I  didn't  make  a  contract  based  on  the  price  fixed  by  the 
exchange,  but  depended  on  my  neighbors.  If  I  was  next  to  a 
Borden  creamery,  the  farmers  insisted  upon  the  Borden  price.  I 
have  paid  at  the  creamery  five  or  six  prices.  Those  that  had  a 


Xo.  45.]  293 

very  good  milk  I  would  buy  on  a  butter  basis  and  give  them  such 
and  such  figures.  If  Borden's  price  was  lower  than  the  exchange 
had  been,  they  would  want  exchange  prices.  So  I  think  there  was 
once  or  twice  when  we  based  it  upon  what  the  exchange  declared. 
I  consider  my  stock  in  the  Consolidated  worth  about  $2 
a  share.  It  is  of  no  benefit  to  me.  I  think  the  value  established 
was  of  more  use  to  the  wholesalers  than  it  was  to  me.  Practi- 
cally, it  didn't  make  any  difference  to  me.  I  used  to  foe  a  member 
of  the  Mutual  Aid  Society,  but  I  am  not  at  present.  I  own  stock 
in  the  Dairymen's  Manufacturing  Company.  They  manufacture 
milk  cans.  At  a  meeting  of  the  Consolidated,  nine  members  con- 
stituted a  quorum  and  the  majority  of  the  quorum  controlled.  I 
would  say  members  of  the  exchange  probably  handled  a'bout  50 
per  cent,  of  all  the  milk  coming  into  New  York  City. 


APPENDIX. 


MILK  SUPPLY  OF  NEW  YORK  CITY,  WITH  RECOM- 
MENDATIONS SUBMITTED  TO  THE  MAYOR  BY 
THE  MILK  COMMISSION,  MAY  22,  1907. 
The  milk  supply  of  New  York  comes  from  between  30,000  to 
40,000  farms  located  in  six  States,  some  points  of  shipment  being 
400  miles  from  the  city.  At  these  points  of  shipment  the  milk 
is  commonly  delivered  to  the  creameries,  where  it  is  mixed,  cooled 
and  put  into  receptacles,  usually  forty-quart  cans,  from  which  it 
is  transported  by  railroad  to  New  York  City.  Six  years  ago  the 
Health  Department  began  general  surveillance  of  the  milk  supply 
with  special  reference  to  proper  icing  while  en  route,  and  two 
years  ago  inspection  of  the  creameries  was  taken  up  by  the 
Health  Department,  and  to  this  end  the  territory  supplying  milk 
to  New  York  was  divided  into  fifteen  special  districts  with  one 
inspector  assigned  to  each  district.  Instructions,  recommenda- 
tions and  advice  are  supplied  by  the  Department  of  Health  to 
farmers  and  the  department  has  up  to  May  22,  1907,  inspected 
20,000  farms.  Few  farmers  ship  directly  to  New  York,  but  most 
of  them  deliver  it  to  creameries,  at  which  the  milk  is  mixed, 
strained,  cooled  and  canned,  and  the  670  creameries  now  supply- 
ing milk  to  New  York  have  for  the  most  part  been  put  in  good 
sanitary  condition.  The  milk  is  usually  transported  in  refrige- 
rator cars  and  kept  at  a  temperature  of  not  more  than  fifty  degrees 
F.  In  New  York  the  milk  is  supplied  to  the  public  through 
14,107  stores  in  which  the  Health  Departmen  has  found  that  its 
instructions  have  been  substantially  carried  out. 

The  risk  of  transmitting  tuberculosis  through  milk  from  cows 
to  man  is  very  slight  unless  the  disease  in  the  cow  is  in  advanced 
form  or  present  in  the  udder.  Even  this  slight  risk  is  considerably 
lessened  when  such  milk  is  mixed,  as  it  generally  is,  with  that  of 
healthy  cows  before  it  is  sold.  We  believe  that  this  danger  has 
been  greatly  overestimated  in  the  public  mind  and  that  it  can  best 
be  met  by  systematic  inspection  and  condemnation  of  cows  reveal- 
ing tuberculosis  on  physical  examination.  Adequate  inspection 

of   thp    srmrpps    of   infpr»tirvn    in    thp    rwimtrv   is   psspntial    to 


296.  [SENATE 

tion  against  typhoid  fever,  scarlet  fever,  diphtheria  and  other  dis- 
eases conveyed  by  employees  at  the  farms  and  creameries  at  which 
milk  is  handled,  and  the  Health  Department  provides  for  this 
through  its  regulating  the  care  and  handling  of  milk.  In  order 
to  have  efficient  "inspection  of  the  milk  business  at  least  100 
inspectors  for  the  country  districts  from  which  the  supply  is 
drawn,  in  addition  to  the  fifteen  now  available,  should  be  em- 
ployed. 

Skimmed  or  separated  milk  should  he  allowed  under  proper 
safeguards.  Skimmed  milk  has  a  high  nutritive  value  and  should 
be  cheaper  than  full  milk.  The  receptacles  in  which  it  is  sold 
should  be  plainly  labeled  "  skimmed  milk."  It  has  been  demon- 
strated that  the  high  infant  mortality  in  summer  can  be  materially 
reduced  by  providing  clean  milk  properly  modified  and  pasteur- 
ized for  feeding  babies. 

Notwithstanding  after  all  safeguards  that  may  be  imposed  by 
education  and  otherwise,  there  will  be  cases  in  which  unsafe  milk 
will  be  produced  or  offered  for  sale,  and  all  such  milk  must  be 
judged  on  its  merits.  The  commission,  therefore,  re-commends 
that  the  Board  of  Health  should,  according  to  circumstances,  re- 
quire sufficient  sterilization  or  pasteurization  of  all  milk  which  it 
finds  unsafe  for  consumption  as  raw  milk,  on  account  of  a  suspi- 
cion of  the  presence  of  tuberculosis  or  other  disease  in  the  cows 
or  unsanitary  conditions  of  the  dairy  or  a  persistent  high  bacterial 
content.  But  in  every  instance  milk  so  heated  should  be  rapidly 
cooled  to  at  least  forty  degrees  F.,  and  be  put,  after  sterilization 
or  pasteurization,  into  sterilized  containers  under  aseptic  precau- 
tions. The  pasteurization  of  milk  should  be  done  only  a  few 
hours  before  delivery  to  the  consumer,  and  the  container  should 
be  marked  with  the  time  and  date  of  pasteurization  and  the  degree 
and  duration  of  temperature  employed  for  the  purpose. 

DR.  E.  J.  LEDERLE,  PH.  D., 

COMMISSIONER    OF    HEALTH,    CITY    OF    NEW    YORK. 

(In   a   paper   read  before  the   second  annual   convention  of  the  International 

Milk   Dealers'  Association,  held  in  Milwaukee,  October   18,   1909.) 

It  occurred  to  me  that  a  recital  of  the  New  York  City  condi- 
tions, with  which  I  am  the  most  familiar,  would  illustrate  what  is 


No.  45.]  297 

going  on  in  other  cities,  with  such  variations  as  would  be  incident 
to  differences  in  population  and  local  conditions. 

In  the  year  1902,  the  New  York  City  Department  of  Health 
inaugurated  a  comprehensive  investigation  into  the  conditions  sur- 
rounding the  production,  transportation  and  vending  of  the  milk 
supply.  The  findings  were  about  the  same  as  is  experienced  in 
any  large  city. 

The  market  milk  was,  from  the  sanitary  point-  of  view,  as  a  rule, 
in  wretchedly  bad  condition,  due  to  ignorance  and  lack  of  care  in 
production,  which  was  carried  on  practically  without  any  super- 
vision. Many  creameries  were  found  poorly  constructed  and  still 
more  poorly  managed ;  milk  was  not  properly  iced  during  trans- 
portation, bottles  and  cans  were  only  superficially  cleansed,  milk 
was  often  kept  in  unclean  stables  in  the  city,  was  dipped  from  cans 
in  dusty  streets,  was  kept  in  stores  with  unsanitary  surroundings 
and  often  adjoining  bedrooms1.  In  fact,  milk  was  produced  and 
handled  under  conditions  which  tended  toward  an  unclean,  un- 
wholesome product. 

The  authorities  at  once  set  about  to  improve  the  supply  in  all 
directions  pointed  out,  but  it  was  not  until  several  years  later  that 
it  was  possible  to  make  the  comprehensive  country  inspections  at 
dairy  farms  that  are  now  being  so  admirably  carried  out,  resulting 
in  such  marked  improvements. 

The  'State  authorities  have  done  practically  nothing  during  the 
last  years  to  improve  the  sanitary  conditions  under  which  market 
milk  is  produced  and  transported.  They  have  confined  their 
activities  mainly  to  the  regulations  of  adulterations  and  the  super- 
vision of  disease  among  cattle. 

While  New  York  City  has  not  the  legal  authority  to  make  in- 
spections outside  of  the  city  limits,  the  fact  that  its  Health  De- 
partment has  in  force  a  license,  gives  indirectly  the  necessary 
power.  A  city  milk  dealer  may  have  his.  license  revoked  unless  his 
patrons  permit  inspection  and  follow  out  orders  for  improvement  as 
a  result  of  such  inspections.  The  plan  is  working  out  well,  most 
farmers  are  gradually  complying  with  instructions,  and  the  more 
intelligent  of  them  are  well  satisfied  with  the  benefits  derived. 
Probably  the  most  serious  matter  that  has  come  up  in  this  con- 
nection has  been  the  fact  that  it  has  been  usually  not  possible  for 


298  [SENATE 

the  farmer  to  realize  an  extra  compensation  for  the  increased  and 
improved  plant  and  additional  labor  of  production  We  are  in 
a  transition  stage;  all  reforms  work  some  hardships. 

The  matter  of  an  increase  in  the  price  that  the  farmer  must 
receive  for  his  milk  when  properly  produced  is  one  that  must 
soon  be  settled ;  it  will  become  more  and  more  urgent.  1  am  not 
unmindful  in  this  connection  that  some  dealers  are  on  their  own 
initiative  paying  special  prices,  but  this  is  as  yet  fey  no  means  the 
universal  practice.  One  of  the  principal  reasons  for  this  is  the 
general  unwillingness  on  the  part  of  the  public  to  appreciate  the 
value  and  to  pay  an  additional  price  for  a  better  milk  supply,  in 
which  position  they  are  unfortunately  it]>hcld  by  the  daily  press. 
1  am  confident  that  when  the  improvements  are  more  universal 
and  the  conditions  are  thoroughly  understood,  the  public  will  be 
willing  to  pay  a  fair  price  for  wholesome  milk  of  good  quality. 
Some  progress  has  been  made  in  this  respect  in  the  introduction 
of  the  certified,  inspected,  and  scientifically  pasteurized  grades  of 
milk. 

When  those  interested  in  reducing  the  very  high  death  rate  of 
infants  in  our  city  found  what  is  probably  true  of  every  large 
city  in  the  world,  that  the  g<  neral  milk  supply,  the  market  milk, 
was  unfit  for  use  for  feeding  babies,  and  agitation  of  reform  wa? 
begun  which  is  bearing  good  fruit,  but  we  are  yet  in  the  state  of 
a  mere  beginning,  the  surface  has  only  been  slightly  scratched. 

As  in  all  great  movements  of  reform,  there  is  no  agreement  as 
to  the  methods  to  be  employed.  Without  at  this  time  going  into 
details  with  which  you  are  all  familiar,  it  may  be  said  that  there 
was  quite  a  iieneral  agreement  as  to  what  the  unsatisfactory  con- 
dition of  < .iir  milk  supply  was,  and  to  what  it  was  due,  but  there 
were  wide  differences  of  opinion  as  to  the  best  remedial  methods. 

At  the  time  of  the  investigation  there  were  the  following  grades 
of  milk  on  the  New  York  market: 

Certified  milk  (Milk  Commission),  sold  in  bottles  at  from 
twelve  to  fifteen  cents  per  quart,  probably  less  than  1  per  cent,  of 
the  supply.  Bacteria  standard  of  not  over  30,000  per  c.  c. 

Bottled  milk,  special  milk,  and  so-called  baby  milk.  Highest 
price,  nine  cents  per  bottle ;  no  bacteria  standard ;  usually  4  per 
cent,  to  5  per  cent.  fat. 


2<99 


Bottled  milk.     Ordinary  market  milk  of  good  grade  ;  from 
per    cent,    to  4    per    cent,    fat;    no-    bacteria    stand'ard;    bacteria 
usually  very  high.     Price,  eight  cents. 

Bottled  milk.  Selling  at  seven  cents  a  quart  ;  about  3.25  per 
cent,  fat  ;  very  high  in  bacteria. 

So-called  loose  milk.  Brought  to  the  city  in  forty-quart  cans 
and  retailing  from  four  to  seven  cents  a  quart;  ranging  from  3 
per  cent,  to  4  per  cent,  in  fat,  with  bacteria  in  variable  numbers, 
usually  very  high. 

Modified  milk  and  pasteurized  milk  could  also  be  obtained  at 
certain  stations,  maintained  by  Mr.  Nathan  Strauss  for  infant 
feeding. 

I  am  one  among  those  who  at  that  time  strongly  urged  pas- 
teurization, and  briefly  for  the  following  reasons: 

The  dealer  was  being  held  strictly  responsible  for  the  product 
he  sold.  In  the  cases  of  larger  ones,  their  business  had  grown  to 
such  proportions  that  anything  like  strict  supervision  or  control 
of  the  production  was  out  of  the  question.  While  some  have 
exercised  such  control  quite  thoroughly  for  years  others1  have 
grown  up  without  it,  apparently  with  sanctions  of  the  authorities, 
at  any  rate  without  interference  on  their  part. 

Milk  supplies  of  large  cities  cannot  be  shut  off  while  experi- 
ments are  being  made  as  to  the  best  methods  of  improvement. 
I  was  aware  that  tuberculosis  was  very  common  among  dairy 
herds  ;  that  it  was  recognized  there  was  some  danger  of  infection 
from  this  source;  that  the  practical  elimination  of  this  disease 
from  the  herds  could  not  be  accomplished  in  many  years,  and  that 
practically  nothing  was  being  done  in  that  direction  by  the  au- 
thorities. The  excellent  system  of  inspection  of  the  farms,  while 
very  valuable,  could,  in  my  opinion,  not  for  a  long  time,  if  ever, 
be  so  thorough  as  to  eliminate  danger  from  transmission  of 
typhoid  fever,  scarlet  fever  and  diphtheria  from  milk. 

It  seemed  that  the  conditions  warranted  safeguarding  by  treat- 
ment where  original  purity  was  unattainable. 

At  the  same  time  attention  was  called  to  the  necessity  of  correct- 
ing the  evils  at  the  point  of  production. 

Our  city  was  now  aroused  over  the  milk  question,  and  a  bitter 
controversy  was  waged  between  two  factions  as  to  the  best  means 


300  [SENATE 

of  securing  safe  milk,  some  maintaining  that  the  best  and  only 
solution  was  the  production  of  clean,  raw  milk,  as  typified  by  cer- 
tified milk,  and  others  claiming  that  the  remedy  must  be  more 
immediate  one  than  is  possible  by  clean,  raw  milk  production  - 
that  is,  that  pasteurization  must  be  resorted  to.  Much  has  been 
produced  by  very  able  writers  on  the  subjects  of  clean,  raw  milk 
and  pasteurized  milk,  and  I  could  probably  add  nothing  new,  but 
I  will  state  briefly  what  I  believe  to  be  the  principles  involved  and 
the  stand  which  in  my  opinion  the  dealers  should  take,  both  from 
the  viewpoint  of  the  public  health  and  in  their  personal  interests, 
which  are  in  this  case  identical. 

The  duty  of  the  milk  dealer  is  to  me  clear.  It  is  to  supply  the 
quality  of  milk  which  is  approved  by  those  disinterested  physi- 
cians and  sanitarians  who  have  made  a  special  study  of  the  re- 
quirements of  infants  and  invalids  and  who  are  familiar  with 
public  health  problems  in  their  broadest  application. 

In  the  present  light  of  knowledge  on  the  subjejct,  it  would 
apear  that  a  dealer  should  not  be  satisfied  to  offer  the  public  any 
milk  unless  it  be  clean  and  safe,  either  a  clean,  high-grade  market 
milk,  scientifically  pasteurized,  or  a  clean,  raw  milk  of  low  bac- 
teria count  from  healthy  animals. 

PURE  MILK  AXD  PASTEURIZED  MILK. 

During  the  last  few  years  the  public  has  been  thoroughly  ad- 
vised on  all  matters  pertaining  to  clean  milk  and  pasteurized 
milk.  Every  one  recognized  the  necessity  of  clean  milk,  but  more 
and  more  are  won  over  to  see  the  absolute  necessity,  under  the 
present  conditions  in  large  cities,  of  pasteurization.  All  admit 
that  the  ideal  milk  is  that  from  healthy  animals  produced  under 
strictly  cleanly  conditions  and  properly  transported  and  rendered 
in  clean,  sealed  packages;  also  that  it  is  impossible  to  obtain  such 
milk  generally  now,  and  that  it  will  be  for  a  long  time  to  come. 

It  had  been  scientifically  demonstrated  that  the  heating  of  milk 
to  a  temperature  of  145  to  150  degrees  for  thirty  minutes  (pas- 
teurization) will  kill  all  the  ordinary  disease  germs  which  may 
occur  in  milk  and  most  of  the  other  germs  that  are  considered 
harmless,  but  which  cause  deterioration  and  entail  financial  loss. 
As  only  a  very  slight  deterioration,  if  any,  is  effected  by  such 


No.  45.]  301 

treatment  (it  is  claimed  by  some  that  the  milk  is  slightly  less 
digestible),  there  is  no  good  reason  why  pasteurization  should  not 
be  generally  applied  and  even  required  for  all  milk  not  otherwise 
known  to  be  absolutely  safe.  I  think  the  most  serious  objection 
to  the  general  introduction  of  pasteurization  is  that  it  is  possible 
for  selfish  dealers  to  treat  otherwise  unmarketable  milk  and  make 
it  saleable.  This  can  and  should  be  overcome  by  strict  regula- 
tions, and  the  conscientious  dealer  will  strive  to  improve  his 
supply  just  as  rigidly  in  the  case  of  the  milk  which  is  to  be  pas- 
teurized as  that  which  is  offered  raw.  The  movement  for  clean 
milk  must  not  be  retarded  by  the  introduction  of  pasteurization. 

Under  existing  conditions  no  large  dealer,  to  my  mind,  can 
afford  to  supply  milk  in  large  cities  unless  it  is  either  of  the  cer- 
tified type,  guaranteed  or  inspected,  or  scientifically  pasteurized. 
New  conditions  are  forcing  great  changes  in  the  character  of  con- 
ducting a  large  milk  business. 

These  conditions  make  for  concentration.,  a  gradual  absorption 
of  the  small  and  often  incompetent  men  into  larger  concerns  and 
will  bring  about  what  the  press  is  pleased  to  term  the  "  milk 
trust/' 

It  is  an  evolution  that  we  see  going  on  about  us  in  every  line 
of  business.  In  the  milk  business  my  observation  is  that  it  is 
working  out  to  the  great  benefit  of  the  public.  It  is  not  con- 
ceivable that  there  can  ever  be  any  danger  of  a  harmful  combina- 
tion among  producers  of  milk.  What  then  will  be  the  require- 
ments of  our  future  milk  supplies  of  large  cities  from  a  sanitary 
standpoint? 

Milk  production,  transportation  and  distribution  will  be  under 
strict  control,  federal,  state  and  municipal. 

Every  farm  producing  milk  for  sale  will  operate  under  a 
permit.  This  will  place  the  production  of  milk  intended  for  use 
in  condenseries,  butter  and  cheese  factories,  under  the  same  con- 
trol as  market  milk,  thus  preserving  the  economic  balance  which 
under  the  present  conditions  is  uncontrolled,  and  operates  as  a 
very  unjust  and  disturbing  factor  in  the  milk  business. 

All  milk  should  be  bought  at  creameries  on  the  butter  fat 
test,  this  being  the  only  fair  means  to  both  parties  to  determine 
its  value,  thereby  encouraging  the  production  of  best  grades.  The 


302  [SE 

creamery  should  be  obliged  to  standardize  its  milk,  thereby  being 
able  to  sell  milk  on  its  merits.  The  milk  should  be  brought  to 
the  city  in  sealed  containers  in  refrigerator  cars.  All  dipping  of 
milk  should  be  forbidden ;  where  milk  is  permitted  to  be  drawn  in 
stores,  it  must  be  from  sealed  containers  from  some  form  of  spigot 
and  delivered  to  the  consumer  in  single  service  packages.  Milk 
made  from  the  above  grades  should  be  carefully  pasteurized  so  as 
to  avoid  disease  germs.  All  cream  should  be  pasteurized  and  sold 
on  the  butter  fat  basis.  Milk  even  from  untested  herds  may  be 
permitted  to  be  sold  when  properly  pasteurized. 

A  very  necessary  corollary  to  make  these  new  conditions 
economically  successful,  and  otherwise  they  can  have  no  per- 
manency, is  that  the  public  must  be  educated  to  the  appreciation 
•of  their  value.  It  will  inevitably  result  in  higher  prices  paid  to 
the  farmer  and  a  iicncral  advance  in  the  cost  of  milk  to  the  public, 
but  it  will  also  mean  fewer  deaths  among  babies,  healthier  and 
stronger  children  and  practical  elimination  of  danger  of  the 
spread  of  tuberculosis,  typhoid  fever,  and  scarlet  fever  through 
milk,  achievements  all  worthy  of  every  one's  best  efforts. 

COUNTRY    MILK    AM)    DAIRY    INSPECTION  BY  THE 
DEPARTMENT  OF  HEALTH,  CITY  OF  NEW  YORK. 

There  arc  fifty-seven  inspectors  of  foods  (milk)  detailed  to  the 
inspection  of  the  milk  supply  of  New  York  City.  Two  of  these 
inspectors,  designated  as  supervising  inspectors,  are  detailed  to 
have  charge  of  the  country  and  city  division,  respectively. 

Country  milk  inspection  covers  the  production  and  transporta- 
tion of  all  milk  sent  to  the  New  York  market.  Thirty-three 
inspectors  of  foods  (milk)  are  detailed  to  the  inspection  of  dairies 
and  creameries  shipping  rnilk,  cream,  or  condensed  milk  to  this 
city.  One  of  these  inspectors  is  in  charge. 

The  milk  supply,  consisting  of  1,650,000  quarts  of  milk  daily,  is 
supplied  from  about  44,000  farms  delivering  milk  to  1,100  cream- 
eries located  in  parts  of  Vermont,  Massachusetts,  Connecticut, 
Now  York,  Pennsylvania,  New  Jersey,  there  being  one  place  in 
Ohio,  and  two  in  Maryland.  This  work  further  includes  the 
supervision  of  all  local  dairies,  and  the  investigation  of  every  case 


Xo.   45.]  303 

of  typhoid  fever,  scarlet  fever,  diphtheria,  or  tuberculosis  occur- 
ring on  a  dairy  producing  milk  for  this  city. 

The  "  milk  area "  is  divided  into  five  districts.  Inspectors 
known  as  district  supervisors  are  placed  in  charge  of  these  dis- 
tricts, supervising  the  work  of  five  or  six  men  under  them. 

Routine  work  consists  in  inspecting  the  creamery,  and  reporting 
all  unsanitary  conditions  found.  The  city  dealer  operating  the 
creamery  is  notified  of  the  unsanitary  conditions  existing  there, 
and  a  reasonable  time  is  given  to  make  the  necessary  improve- 
ments. The  inspector  then  inspects  in  regular  order  the  dairies 
supplying  that  creamery,  usually  visiting  from  eight  to  ten  farms 
a  day. 

Where  the  dairy  scores  90  per  cent,  or  better,  a  certificate  to 
that  effect  is  sent  to  the  farmer. 

Where  the  premises  score  between  50i  per  cent,  and  65  per  cent., 
a  letter  is  sent  urging  closer  compliance  with  the  rules  of  this  de- 
partment governing  the  production  of  clean  and  wholesome  milk. 

Where  unsanitay  conditions  are  found  on  the  dairy  farm,  the 
dairyman  is  notified  of  these  conditions,  and  a  full  list  of  the 
recommendations  of  the  inspector  is  enclosed.  A  reinspection  is 
then  ordered  to  be  made  within  thirty  days  by  the  district  super- 
visor. The  operator  is  also  notified  so  that  he  may  urge  upon  the 
dairyman  the  necessity  of  improving  his  premises.  Usually  at 
this  reinspection,  improvement  is  found ;  if  however,  the  premises 
are  still  an  unsanitary  condition,  and  the  milk  is  being  produced 
in  violation  of  the  rules  and  regulations  of  this  department,  the 
creamery  operator  is  notified  to  accept  no  further  milk  from  the 
dairyman  for  shipment  to  this  city.  If  a  dairyman  refuses  to 
allow  the  inspector  to  inspect  his  premises,  the  creamery  operator 
is  notified,  and,  as  in  the  case  of  an  unsanitary  condition,  milk  is 
not  accepted  until  inspection  is  made. 

Whenever  a  water  supply  is  found  in  use  on  a  farm  that  is 
aparently  contaminated  or  not  free  from  suspicion,  a  sample  of 
that  water  is  taken  for  shipment  to  the  Laboratory  of  the  Depart- 
ment of  Health  for  analysis,  If  it  is  found  to  be  contaminated, 
the  dairyman  is  immediately  notified  to  either  discontinue  that 
supply  of  water  or  boil  it  before  using,  and  a  new  and  un con- 
taminated supply  of  water  must  be  secured  within  a  very  limited 


304  [SENATE 

time,  or  the  creamery  operator  will  be  notified  to  discontinue  the 
acceptance  of  such  milk. 

In  making  a  creamery  inspection,  the  inspector  makes  special 
note  as  to  whether  the  infectious  disease  reports  are  being  properly 
filed  by  every  dairyman  drawing  milk  thereto.  Wherever  any  of 
the  following  infectious  diseases  are  reported  on  a  dairy  farm  — 
typhoid  fever,  scarlet  fever,  diphtheria,  or  tuberculosis,  an  inspec- 
tor is  sent  to  make  a  careful  investigation  and  secure  a  full  history 
of  the  case,  and  it  is  upon  his  report  that  milk  is  continued  to  be 
accepted  for  shipment. 

Dairies  scoring  above  th«  average,  the  cows  in  which  herds  have 
no  clinical  symptoms  of  tuberculosis  or  other  disease  and  whose 
milk  having  a  minimum  bacterial  content  of  00,000  germs  per 
e.  c.  in  winter,  and  not  more  than  100, 000  germs  per  c.  c.  in 
summer,  may  secure  a  permit  to  sell  what  is  known  as  "  selected 
milk." 

Dairies  having  perfect  equipment  in  the  way  of  concrete 
stables,  and  dairy  house,  having  only  cows  in  the  herd  which  have 
successfully  passed  the  tuberculin  test,  and  who  are  producing 
milk  containing  not  more  than  30,000  germs  per  c.  c.  may  secure 
a  certificate  to  produce  "  guaranteed  milk." 

Inspectors  make  a  complete  report  daily  of  the  number  and 
character  of  inspections  made;  also  the  time  they  commenced 
work,  the  time  of  each  inspection,  and  the  time  they  finished  work 
for  the  day,  making  a  total  of  the  hours  on  duty. 

The  local  dairies,  numbering  approximately  145,  locate  in  the 
four  outlying  boroughs  and  the  territory  immediately  adjacent 
thereto,  supplying  daily  over  36,417  quarts  of  milk,  are  inspected 
by  one  man  who  devotes  his  entire  time  to  visits  among  these 
dairymen. 

During  the  year  1909,  51,116  dairies  were  inspected,  2,348 
creameries,  and  170  water  samples  were  taken.  During  the  first 
three  weeks  of  this  year  (1910)  2,347  dairy  inspections  were 
made,  228  creamery  inspections;  140  milk  samples  were  taken 
for  chemical  analysis,  and  three  water  samples. 

For  the  inspection  of  milk  within  the  city,  twenty-two  inspec- 
tors are  assigned,  with  one  in  charge.  The  field  covered  by  this 
branch  of  the  inspection  service  includes  examining  and  testing 


'No.  45.]  305 

the  quality  of  the  milk  as  offered  for  sale,  taking  samples  and 
delivering  same  to  the  laboratories  for  chemical  analysis  and  bac- 
teriological examination;  appearing  in  court  as  witness  during 
prosecutions  for  the  sale  of  adulterated  milk;  sanitary  inspection 
of  premises  holding  or  applying  for  permits  to  sell  milk;  investi- 
gating source  of  domestic  supply  in  reported  cases  of  typhoid 
fever;  testing  temperature  of  milk  as  brought  into  the  city,  and 
as  offered  for  sale  in  stores  or  on  wagons. 

During  1909,  115,250  inspections  were  made  in  the  city,  11,611 
samples  of  milk  were  taken,  resulting  in  870  prosecutions  with 
fines  amounting  to  $8,380. 

DEPARTMENT  OF  HEALTH, 

City  of  Chicago. 

MR.  L.  HOKTON,  524  West  57th  Street,  New  York  City. 

Dear  Mr.  Horton. —  The  Atlantic  City  session  of  the  Milk 
Commissions  was  held  on  Monday  morning,  afternoon  and  even- 
ing. Monday  afternoon  a  very  valuable  paper  on  pasteurization 
of  market  milk  was  read  by  Dr.  Joseph  Evans  of  Philadelphia. 
There  was  an  extended  discussion  of  pasteurized  milk  at  that 
time,  in  which  I  participated.  Dr.  Darlington  was  not  present. 
I  did  not  go  to  the  night  meeting,  but  I  understood  that  at  the 
night  meeting  Dr.  Darlington  told  of  some  pasteurizers  which, 
running  uncontrolled,  had  given  a  product  that  was  far  from  per- 
fect. 

All  the  discussion  in  the  afternoon  was  in  favor  of  pasteuriza- 
tion, and  I  believe  that  I  talked  for  it  more  strongly  than  any  man 
who  was  present  in  the  room. 

It  is  my  judgment  that  control  is  necessary  with  all  kinds  of 
milk.  That,  properly  controlled,  the  town  cow  furnishes  the  con- 
sumer with  the  highest  grade  of  milk;  second  comes  certified 
milk;  third  pasteurized  milk,  and  fourth  raw  milk.  Control 
cannot  be  relinquished  from  any  one  of  the  four.  It  is  just  as 
necessary  for  pasteuried  milk  as  for  any  other  kind  of  milk,  but, 
properly  controlled,  pasteuried  milk  gives  a  supply  so  infinitely 
preferable  to  market  milk  as  that  in  my  judgment  to  permit  milk 
to  be  sold  when  pasteurized  milk  can  be  had  is  almost,  if  not 
quite,  a  crime. 


306  [SENATE 

Proper  pasteurization  will  control  typhoid,  diphtheria,  tuber- 
culosis and  diarrhoea,  in  so  far  as  they  spread  by  milk,  and 
against  it  I  cannot  see  any  disadvantage  that  is  other  than  trivial 
and  academic. 

I  am  for  pasteurized  milk  with  every  unit  of  energy  which  I 
possess  and  my  conscience  will  not  allow  me  to  take  any  other 
position. 

Yours  very  truly, 

W.  A. -EVANS, 
Commissioner  of  Health. 

FROM  A  REPORT  TO  MR.  LOTONT  HORTOX  BY  AN 
EMINENT  ArTKORITY  OX  MILK  SUPPLY  AND 
MILK  CONTROL  IN  BERLIN. 

Berlin  with  a  population,  including  the  suburbs,  of  two  and 
one-half  million,  uses  266,667,580  quarts  of  milk  per  year,  or 
780,596  quarts  per  day.  Some  is  produced  in  the  city  stables. 
but  the  greater  part  is  brought  to  the  city  by  local  dealers  and 
sent  from  the  country  either  by  railroad  or  driven  to  the  city  in 
wagon-.  Most  of  the  milk  is  sold  from  wagons.  Milk  is  usually 
short  in  September  and  October.  The  average  price  to  the  farmer 
including  freight  is  from  three  cents  to  three  and  one-third  cents 
per  quart  —  selling  price  four  and  one-half  cents  to  five  cents 
per  quart.  Special  prices  are  obtained  for  special  kinds  of  milk. 
Children's  milk  from  eight  cents  to  fifteen  cents  per  quart. 
During  the  last  three  years  distant  creameries  have  been  sending 
to  the  city  large  quantities,  of  pasteurized  milk.  Cream  is  sold 
to  the  jobber  at  the  rate  of  three-fourths  of  a  cent  to  seven-eighths 
of  a  cent  for  each  per  cent,  fat  per  quart. 

For  some  years  there  has  been  a  so-called  milk  war  going  on 
in  the  city  on  account  of  the  consolidation  of  some  of  the  largest 
dealers  forming  a  so-called  Zentral  for  handling  of  milk.  The 
Zentral  could  not  pay  the  promised  price  to  the  producer  of 
three  and  three-eighth  cents  per  quart  free  in  Berlin,  but  deducted 
three-eighths  cent,  and  the  position  of  the  producer  was  not  im- 
proved. In  1902  the  Zentral  lost  about  $100,000.  In  1003  they 
made  a  small  profit,  after  writing  off  about  $20,000. 


No.  45.]  307 

Long  distance  transportation  charges  are  much  cheaper  than 
in  this  country.  The  milk  is  distributed  by  means  of  300  wagons 
and  375  horses.  The  milk  is  never  dipped  from  cans  but  always 
drawn  from  a  spigot.  The  cans  are  square  so  as  to  take  up  the 
least  amount  of  room.  Each  wagon  has  cans  full  of  skim  milk, 
cream  of  various  grades,  and  buttermilk,  each  drawn  from  a 
labelled  spigot.  The  cans  are  locked,  and  a  contrivance  prevents 
in  a  great  measure  any  separation  of  cream  from  the  full  milk. 
The  cans  are  arranged  on  each  side  of  the  wagon  and  are  inclosed 
and  covered  so  that  only  the  spigot  shows.  In  the  rear  of  the 
wagon  is  a  compartment  for  cheese,  honey,  bottled  milk,  koumyss. 
sterilized  milk  and  butter  and  for  small  delivery  cans. 

Milk  is  brought  from  the  dairies  in  twenty-quart  cans,  which 
are  always  locked.  There  are  about  200  collecting  points  from 
which  the  milk  is  brought  'by  train  into  Berlin.  At  the  dairies  it 
is  filtered  and  cooled.  At  Bolle's  place  each  can  is  tested,  samples 
being  taken  to  the  laboratory.  The  milk  is  run  into  large  storage 
tanks  in  which  are  coils  through  which  cold  water  is  run  in  sum- 
mer. The  milk  is  kept  at  1  C.  or  34  F.,  and  the  milk  kept  from 
twelve  to  fifteen  hours,  if  necessary.  The  milk  is  filtered  and 
pasteurized,  and  this  is  done  in  the  cellar  as  the  milk  comes  from 
the  storage  tanks.  The  filtering  material  is  sand  which  is  care- 
fully washed  after  each  using.  The  milk  after  filtration  is  pas- 
teurized. Each  pasteurizer  holds  8,000  quarts.  Milk  is  heated 
to  65  C.  or  149  F.  for  forty-five  minutes  by  means  of  steam  coils. 

Every  cow  is  subjected  to  the  tuberculin  test  and  the  main 
office  notified  by  telegraph  whenever  a  case  of  infectious  disease 
occurs  on  any  farm  from  which  milk  is  shipped.  From  30  per 
cent,  to  40  per  cent,  of  the  cows  have  tuberculosis.  The  largest 
part  of  the  supply  of  milk  is  sold  as  whole  milk  and  always  sold 
on  a  butter  fat  basis.  There  is  no  law  against  skim  milk  in  Berlin. 
Bolle  inspects  dairies  through  his  own  representatives  in  the  coun- 
try who  supply  milk  systematically  for  chemical  and  bacteriologi- 
cal tests. 


. «.' 


a  tt 


308  [SENATE 

PRICES  OF  MILK. 
Children's  Milk. 

Bottled,  delivered,  not  pasteurized IS1/!*',    per  quart. 

From  selected  dairies,  cooled  in  transit,  veter- 
inary control,  dry  feeding lOc. 

Whole  milk. 
From   selected   dairies,   veterinary  control,   at 

least  3  per  cent,  butter  fat 4  !/•»<*. 

Skim  Milk. 
Delivered 2M»c.      " 

Buttermilk. 

Delivered 3c. 

Whipping  Cream. 
28  per  cent,  to  30  per  cent,  fat 50c. 

Sterilized  Ml/1,: 
Mi  L 7M.-C.      " 

Butter. 

Unsalted,  from  pasteurized  cream 50c.        per  pound. 

Wages. 

Single  man,  including  board  and  lodging.  ...  $7.50  per  month. 

Married  men,  without  board  and  lodging.  ...  5.25  per  week. 

Drivers  (and  a  commission  on  sales) 6.00  per  week. 

MJLK  CURE  ESTABLISHMENT  AT  VICTORIA  PARK, 
BERLIN.—  FR1EDLICH  GRUB,  PROPRIETOR. 

This  place  was  established  in  1888  to  furnish  exclusively  special 
milk  for  invalids  and  children. 

The  cows  are  kept  in  the  city  and  every  care  taken  to  produce 
the  highest  grade  of  milk.  The  cows  are  not  tested  by  tuberculin 
test,  which  they  do  not  believe  in,  but  by  bacteriological  examina- 
tion of  the  sputum.  All  cows  are  bought  just  after  calving,  and 
are  stall-fed  and  milked  almost  dry,  when  they  are  sold  for  beef. 
They  are  taken  to  one  slaughter  house  and  careful  examination 


~No.  45.]  309 

made  of  the  organs  of  each  cow  killed,  which  is  a  check  on  their 
method  of  control.  The  cows  cost  $140  a  piece  and  are  sold  at  a 
loss  of  about  $40.  Great  care  is  taken  in  filtering  and  cooling  of 
the  milk  and  arrangements  are  made  with  the  Bureau  of  Agri- 
culture to  make  all  necessary  chemical  and  bacteriological  tests. 

PRICES  OF  MILK. 

Whole  milk 15c.       per  quart. 

Pasteurized  milk TMzc.    per  quart, 

TUBERCULOSIS    REPORT   BY   UNITED    STATES    DE- 
PARTMENT OF  AGRICULTURE. 

BUREAU  OF  ANIMAL  INDUSTRY  —  BULLETIN  No.  99,  ISSUED 

MAY  11,  1907. 

"  Regarding  the  dairy  industry,  we  know  of  the  following  im- 
portant facts  (1)  that  the  commonest  disease  with  which  cows  are 
affected  is  tuberculosis,  and  (2)  that  milk  in  some  form  reaches 
practically  all  persons." 

"  The  inhalation  of  the  tubercle  bacilli  is  losing  much  of  its 
importance  in  the  minds  of  investigators,  and  the  swallowing  of 
tubercle  bacilli  is  gradually  supplanting  it  as  the  true  mode  of 
infection/' 

Milk  from  tuberculous  cows  supplies  the  best  known  and  widest 
distribution  for  tubercle  bacilli  and  the  frequency  of  the  presence 
of  tubercle  bacilli  in  milk  is  underestimated. 

PRINCIPLES  OF  SANITARY  AND   PUBLIC  HEALTH. 

BY  DR.   SEDGWICK. 

Milk  is  one  of  the  most  dangerous  vehicles  of  infectious  disease. 
Chapted  XI,  page  263. 

Physicians  and  sanitariums  regard  it  in  its  uncooked  condition 
with  suspicion.  In  1881  Mr.  Hart  read  a  paper  before  Inter- 
national Medical  Congress  on  milk  as  carrying  infectious  disease, 
such  as  Asiatic  cholera,  typhoid,  diphtheria.  Infectious  diseases 
so  far  as  conveyed  by  raw  milk  can  be  altogether  avoided  by 
sterilizing  milk. 


310  [-SENATE 

PASTE  UKIZATIO;N  . 

While  the  Milk  Commission  does  not  believe  that  pasteurized 
milk  is  perfect  food,  it  does  believe  and  has  demonstrated  most 
conclusively,  that  until  the  time  arrives  when  the  production, 
handling,  distribution  and  after-care  by  the  consumer.,  is  univer- 
sally brought  up  to  the  standard  that  is  ideal,  pasteurized  milk  is 
an  absolute  necessity  for  the  infant,  whose  mother  is  unable  to 
provide  the  natural  food. 

We  pasteurize  by  heating  the  milk  to  a  temperature  of  170°  F. 
and  cooling  at  once  to  40°  F.  By  bacteriological  tests  made 
weekly  we  know  that  we  annihilate  all  growing  bacteria.  Our 
method  of  pasteurization  and  instantaneous  cooling  does  not  give 
milk  any  cooked  taste.  Instead  it  has  a  sweet,  palatable  flavor 
which  is  distinctly  agreeable.  Xo  difference  appears  between  the 
nutritive  values  of  raw  'and  pasteurised  milk.  From  the  stand- 
point of  safety  pasteurized  milk  has  given  satisfactory  results. 

PAMPHLET  OF  TIIK  AMOI'XT  OF  TUBERCULOSIS 
CKK.MS  IX  MILK  AND  OTIIKK  DAIRY  PRODUCTS 
IX  LEIPZIG,  GERMANY. 

BY  PKOK.  DR.  A.  EHKK,  UMVEKSITY  OF  LKIP/K;. 

Ten- years  of  experiments  prove  that  commercial  milk  contains 
tuberculosis  germs.  In  the  City  of  Leipzig,  Germany,  in  UK):), 
the  daily  supply  of  milk  was  t)  1,881  quarts,  of  which  3,150 
quarts  were  produced  in  the  city,  50,343  shipped  by  rail,  and 
38,888  quarts  were  hauled  in.  Except  the  milk  produced  in  the 
city  all  milk  was  handled  by  663  dealers.  "  Such  a  splitting  up 
of  the  milk  business  is  exceedingly  objectionable  from  a  hygienic 
standpoint,  because  the  sale  of  the  product  among  smaller  dealers 
is  done  from  open  vessels."  After  exhaustive  tests  we  found  that 
the  danger  of  buying  milk  containing  tuberculosis  germs  in  Leip- 
zig is  not  slight  according  to  our  views,  because  out  of  seventy 
milk  dealers  19-27.1  per  cent,  sold  at  least  once  for  a  certain 
period  milk  containing  tuberculosis  germs.  Of  the  large  dealers 
27.8  per  cent.,  who  supply  more  than  50  per  cent,  of  the  trade, 
delivered  milk  containing  tuberculosis  germs,  while  out  of  the 
fifty- two  smaller  dealers  26.9  per  cent,  had  tuberculosis  germs  in 


No.  45.]  311 

their  milk.  The  percentage  of  samples  containing  tuberculosis 
germs  in  comparison  with  the  total  number  of  samples  taken  was 
10.5  per  cent.,  namely  22  cases  out  of  210. 

The  highest  hygienic  authority  in  Germany,  namely  the  "  Kais- 
erlidge  Gesimdheitsaint  in  Berlin/'  just  published  Bulletin  No.  6. 
1907,  of  which  the  following  is  the  summary:  The  results  of  the 
experiments  are  of  tremendous  importance  to  the  hygiene  of  meat 
and  milk,  because  they  show  that  the  infection  of  human  beings 
with  the  bacilli  of  "  type  bovine  "  is  especially  a  disease  of  child- 
hood, and  that  the  germs  get  into  the  system  through  the  intestinal 
tract.  There  can  be  no  dou'bt  that  the  bacilli  (type  bovine)  can 
develop  a  generalized  tuberculosis  in  human  beings.  The  infec- 
tion with  bacilli  (type  bovine)  has  to  be  traced  to  foods  coming 
from  tuberculosis  cows,  -especially  milk. 

UNITED   STATES  DEPARTMENT   OF  AGRICULTURE. 

BUREAU  OF  ANIMAL  INDUSTRY  —  CIRCULAR  No.  Ill,  ISSUED 

JUNE  22,  1907. 

The  Commissioners  of  the  District  of  Columbia  appointed  a 
committee  or  conference  composed  of  scientists,  physicians,  veter- 
inarians, milk  producers  and  dealers,  attorneys,  and  business  men 
to  consider  and  report  upon  the  local  milk  supply  and  to  suggest 
legislation  to  that  end.  Those  engaged  in  the  industry  regarded 
the  investigation  as  a  "  meddlesome  interference  with  the  trade/7 
Milk  is  a  vehicle  of  the  germs  of  tuberculosis,  typhoid  fever, 
cholera  infantum,  scarlet  fever,  and  other  infectious  diseases. 

It  has  been  shown  by  the  most  painstaking  investigations,  ex- 
tending over  a  long  period  of  years,  that  certain  diseases  in  the 
animal  are  communicable  through  the  medium  of  the  milk,  this 
being  especially  true  of  tuberculosis,  foot-and-mouth  disease, 
anthrax,  and  cowpox;  and  that  diseases  like  garget,  gastro-enter- 
itis,  and  septic  fevers  in  the  cow  will  render  the  milk  morbific 
to  man. 

It  has  been  shown  that  animals  which  have  fed  on  poisonous 
forage  plants  or  have  been  treated  with  strong  medicaments  are 
disqualified  from  producing  a  pure  or  sound  milk. 

During  the  past  twenty-five  years  there  have  been  published 
in  the  different  medical  journals  the  histories  of  195  epidemics 


312  [SENATE 

of  typhoid  fever,  99  of  scarlet  fever,  and  36  of  diphtheria,  all 
traceable  to  the  milk  supply. 

In  the  recent  exhaustive  investigation  conducted  by  the  highest 
health  authority  in  this  country,  viz.,  the  United  States  Bureau 
of  Public  Health  and  Marine-Hospital  Service,  the  Commission 
definitely  traced  85  of  the  866  cases  of  typhoid  fever  (about  10 
per  cent.)  in  the  District  of  Columbia  to  the  use  of  infected  milk. 

It  has  been  shown  in  a  former  report  that  in  the  District  of 
Columbia  about  one-fourth,  and  in  the  country  at  large  about 
one-sixth,  of  all  the  children  born  perish  before  the  completion  of 
the  first  year ;  that  nearly  one-half  of  the  deaths  in  children  under 
one  year  of  age  are  caused  by  gastro-enteric  diseases,  chiefly  in- 
fantile diarrhea;  and  that  of  the  54,047  infantile  deaths  which 
have  been  investigated  at  home  ami  abroad  with  reference  to  feed- 
ing, 86.6  per  cent,  had  been  artificially  fed,  all  of  which  points 
with  more  than  mere  suspicion  to  the  fact  the  morbific  agent  is 
introduced  into  the  body  with  the  food  (cow's  milk). 

The  committee  on  certified  milk  and  the  committee  on  sanitary 
relations  of  the  milk  supply  have  both  emphasized  the  importance 
of  cooling  milk  and  keeping  it  at  the  temperature  below  50°  F., 
except  as  may  be  necessary  in  the  process  of  pasteurization  or 
sterilization,  until  the  milk  is  delivered  to  the  consumer.  The 
reason  for  this  is  that  the  milk  when  it  leaves  the  udder  contains 
very  few  germs;  the  majority  gain  access  during  handling, 
especially  when  the  milking  is  done  in  a  dusty  stable,  or  from 
excrementitious  matter  adhering  to  the  teats  and  ndd<T  of  the 
animal.  These  germs  multiply  with  astonishing  rapidity  when- 
ever the  temperature  of  the  milk  is  above  50°  F.,  and  if  disease 
germs  are  present  their  proliferation  augments  the  chances  of 
infection.  A  temperature  of  58°  or  60°  F.  will  not  subserve  the 
interests  of  public  health.  So,  for  example,  "  Petruschky  has 
shown  that  at  a  room  temperature  a  streptococcal  content  of  300 
per  cubic  centimeter  may  increase  in  twenty-four  hours  to  one  of 
10,0'0'0,000;  but  the  same  milk  kept  at  50°  F.  yielded  but 
30,000,  or  about  one  thousand  as  many."  (Harrington.) 

Von  Freudenreich  (Daily  Bacteriology,  London,  1895)  exposed 
a  sample  of  milk  containing  153,000  bacteria  per  cubic  inch  to  a 
temperature  of  59°  F.  One  hour  after  it  contained  539,750  bac- 


Xo.  45.]  313 

teria  per  cubic  indh;  two  hours  after,  616,250;  four  hours  after. 
680,000;  seven  hours  after,  1,020,000;  nine  hours,  2,400,000; 
twenty-five  hours  after,  85,000,000. 

The  public  needs  proper  education  that  clean  milk  is  a  necessity 
and  that  infants'  sickness  and  funerals  can  be  reduced  at  least 
40  per  cent.  It  costs  more  to  produce  clean  and  wholesome  milk 
and  the  consumer  will  have  to  pay  at  least  a  portion  of  it.  "  Cer- 
tified milk  is  reasonably  safe,  but  this  is  no  guaranty  that  it  may 
not  occasionally  contain  germs  of  disease,  and  those  who  desire  to 
guard  against  this  slight  risk  should  pasteurize  it  in  the  home." 
The  committee  in  the  interests  of  public  health  strongly  advocates 
clarification  and  pasteurization  of  all  milk.  "  This,  to  be  sure 
will  not  make  bad  milk  good,  but  it  will  at  least  destroy  its  power 
to  transmit  disease  germs/'  Pasteurizing  plants  under  the  super- 
vision of  the  Health  Department  should  be  established.  "  Milk 
should  never  be  sold  by  grocery  stores  or  milk  shops  unless  it  has 
been  delivered  to  such  establishments  in  original  sealed  bottles, 
and  then  only  when  there  is  provision  for  maintaining  the  milk 
at  a  temperature  of  50°  F. 

The  Director  of  the  Hygienic  Laboratory  of  the  United  States 
Bureau  of  Public  Health  and  Marine-Hospital  Service,  Bulletin 
~No.  42,  unhesitatingly  recommends  compulsory  pasteurization  of 
all  milk  not  certified  under  class  1  or  class  2  of  Doctor  Melvin's 
classification.  The  classification  referred  to  is  as  follows:  Class  1. 
certified  milk  for  infants,  as  hereinbefore  described.  Class  2. 
clean  raw  milk  from  healthy  cows,  as  determined  by  the  tuber- 
culin test  and  veterinary  physical  examination;  the  cows  to  be 
housed,  fed,  and  milked  under  good  conditions,  but  not  necessarily 
equal  to  the  conditions  provided  for  class  1 ;  pure  water,  as  de- 
termined by  chemical  and  bacteriological  examination,  to  be  pro- 
vided ;  the  bacteriological  count  of  the  milk  not  to  exceed  100,000 
bacteria  per  cubic  centimeter,  at  the  time  the  milk  reaches  the 
city,  at  any  season  of  the  year,  as  determined  by  the  Board  of 
Health  Department  at  frequent  intervals;  milk  to  be  delivered  to 
the  customer  in  sterilized  containers  to  be  filled  upon  the  dairy 
farm,  and  the  temperature  of  the  milk  not  to  exceed  50°  F. 
until  delivered  to  the  consumer. 


314  [SENATE 

THE     TERMAL    DEATH    POINTS     OF    PATHOGENIC 
MICRO-ORGANISMS  IN  MILK. 

BY  MILTON  J.  ROSENAU. 

(Surgeon  and  Director  Hygienic  Laboratory  U.  S.  Public  Health  and  Marine- 
Hospital  Service.     Hygienic  Laboratory  Bulletin  No.  42.     January,  1908.) 

The  temperature  at  which  milk  should  be  pasteurized  hinges 
on  the  thermal  death  points  of  the  pathogenic  micro-organisms 
which  contaminate  it.  The  pathogenic  micro-organisms  most  fre- 
quently found  in  market  milk  are  those  causing  tuberculosis, 
typhoid  fever,  diphtheria,  scarlet  fever,  dysentery,  and  Malta 
fever.  Fortunately  none  of  the  organisms  causing  the  above- 
mentioned  diseases  has  resisting  spores.  Moderate  degrees  of 
heat  are,  therefore,  sufficient  to  render  milk  safe  so  far  as  these 
dangers  are  concerned.  Although  it  would  appear  to  be  a  com- 
paratively simple  matter  to  determine  precisely  the  temperature 
at  which  micro-organisms  die,  such  work  is  in  fact  surrounded  by 
many  difficulties  and  pitfalls;  different  investigators  have  come 
to  widely  different  results.  Some  of  these  discrepancies  are  only 
apparent  and  may  be  explained  by  the  relation  of  time  to  tem- 
perature. The  longer  the  time  of  exposure,  the  lower  the  tem- 
perature necessary  to  kill  any  organism.  Differences  in  methods 
are  also  responsible  for  differences  in  results. 

It  is  difficult  to  determine  precisely  at  what  moment  or  at  what 
temperature  a  micro-organism  dies.  The  fact  that  a  micro-organ- 
ism will  not  grow  upon  artificial  media  is  not  always  a  sure  sign 
that  it  is  dead;  but  with  the  exception  of  the  tubercle  bacillus  it 
is  safe  to  assume  that  ordinarily  bacteria  that  fail  to  vegetate  upon 
suitable  media  under  favorable  conditions  have  at  least  lost  their 
virulence  and  power  to  infect,  especially  when  ingested  by  the 
mouth. 

We  know,  however,  that  the  vegetability  of  micro-organisms 
in  vitro  does  not  always  correspond  to  their  ability  to  grow  in 
the  animal  host.  This  is  especially  true  of  the  tubercle  bacillus, 
On  account  of  the  reluctance  with  which  this  bacillus  grows  upon 
culture  media,  it  is  necessary  to  resort  to  animal  inoculations  in 


tfo.  45.]  315 

order  to  determine  its  thermal  death  point.  It  is  proper  to  assume 
that  the  tubercle  bacilli  in  milk  which  are  so  attenuated  as  to  be 
unable  to  cause  tuberculosis  when  injected  into  the  peritoneal 
cavity  of  a  young  guinea  pig  would  be  harmless  when  ingested 
by  man. 

In  these  experiments  upon  the  guinea  pig  it  is  important  to 
differentiate  the  lesions  produced  by  dead  tubercle  bacilli,  which 
closely  simulate  those  caused  by  the  live  tubercle  bacilli.  In 
doubtful  cases  it  is  necessary  to  inoculate  the  products  of  the 
lesions  into  another  animal  to  determine  the  presence  or  absence 
of  living  micro-organisms. 

The  cultural  experiments  upon  thermal  death  points  are  sur- 
rounded by  many  sources  of  errors  and  numerous  pitfalls,  all  of 
which  must  be  avoided. 

My  experiments  were  designed  to  imitate  the  conditions  of 
practical  pasteurization.  The  micro-organisms  were  heated  in 
open  test  tubes  and  the  temperature  and  other  factors  accurately 
controlled.  Scum  formation  was  disregarded,  as  it  was  my  inten- 
tion to  reach  results  that  might  be  applied  with  confidence  in 
practical  pasteurization  on  a  large  scale  against  natural  difficul- 
ties. 

My  results  of  nine  series  of'  tests  upon  guinea  pigs  with  five 
cultures  plainly  show  that  in  milk  the  tubercle  bacillus  loses  it? 
virulence  and  infective  power  when  heated  at  60°  C.  for  twenty 
minutes ;  in  other  words,  it  may  be  considered  dead.  When  heated 
to  65°  C.  as  much  time  is  necessary. 

It  should' be  remembered  that  the  milk  in  these  tests  was  very 
heavily  infected  with  virulent  cultures,  indicated  by  the  prompt 
death  of  the  control  animals.  Milk  practically  never  contains  such 
an  enormous  amount  of  infection  under  natural  conditions.  It 
is  justifiable,  therefore,  to  assume  that  if  60°  C.  for  twenty 
minutes  is  sufficient  to  destroy  the  infectiousness  of  such  milk 
when  injected  into  the  peritoneal  cavity  of  a  guinea  pig,  and  ordi- 
nary market  milk  after  such  treatment  would  be  safe  for  human 
use  by  the  mouth  so  far  as  tubercle  bacilli  are  concerned.  ' 

The  evidence  is  plain  that  milk  heated  to  60°  C.  and  main- 
tained at  that  temperature  for  two  minutes  will  kill  the  typhoid 
bacillus.  The  great  majority  of  these  organisms  are  killed  by 


•316  [SEXATK 

the  time  the  temperature  reaches  59°  C.,  and  few  survive  to 
00°  C. 

The  diphtheria  bacillus  succumbs  at  comparatively  low  temper- 
atures. Oftentimes  it  fails  to  grow  after  heating  to  55°  C.  Some 
occasionally  survive  until  the  milk  reaches  60°  C. 

The  cholera  vibrio  is  similar  to  the  diphtheria  bacillus  so  far 
as  its  thermal  death  point  is  concerned.  It  is  usually  destroyed 
when  the  milk  reaches  55°  C.,  only  once  did  it  survive  to  60°  C. 
under  the  conditions  of  the  experiments. 

The  dysentery  bacillus  is  somewhat  more  resistant  to  heat  than 
the  typhoid  bacillus.  It  sometimes  withstands  heating  at  60°  C. 
for  five  minutes.  All  are  killed  at  60°  C.  for  ten  minutes.  HOWT 
<  vcr,  the  great  majority,  of  these  micro-organisms  are  killed  by 
the  time  the  milk  reaches  60°  C. 

,So  far  as  can  be  judged  from  the  meager  evidence  at  hand, 
60°  C.  for  twenty  minutes  is  more  than  sufficient  to  destroy  the 
infective  principle  of  Malta  fever  in  milk. 

Milk  heated  at  60°  C.  and  maintained  at  that  temperature  for 
twenty  minutes  may,  "therefore,  be  considered  safe  so  far  as  con- 
veying infection  with  the  micro-organisms  tested  is  concerned. 

C.  B.  LANE,   SUPPLEES'  ALDERNEY  DAIRY,  PHILA- 
DELPHIA, PA. 

At  the  International  Tuberculosis  Congress,  held  ;n  Washing- 
ton, D.  C.,  1908,  it  was  made  clear  that  tuberculosis  in  ite  rela- 
tion to  milk  products  to  dealers  and  consumers  was^one  of  the 
greatest  problems  before  the  world  to-day  and  that  it  must  be 
solved  at  any  cost.  The  weight  of  evidence  indicates  that  tuber- 
culosis is  transmittable  from  animal  to  man  and  th?t  milk  from 
tuberculosis  cows  is  dangerous  as  a  food  product. 

In  leading  up  to  the  tuberculosis  question  I  will  review  briefly 
some  of  the  steps  taken  in  the  past  to  better  the  quality  of  milk. 
One  of  the  first  efforts  was  through  the  establishment  of  standards 
for  fats  and  solids  by  various  states  and  some  of  the  larger  cities. 
The  delivery  of  milk  in  bottles  was  another  method  to<  better  the 
quality  of  the  milk  and  was  a  decided  improvement  over  the  old 
"  dipping  "  system.  Many  progressive  dealers  made  an  effort  to 


No.  45.]  317 

secure  a  hight  fat  milk  from  the  better  grade  of  dairies  for  their 
trade ;  while  this  was,  of  course,  limited,  it  was  a  feature  in  im- 
proving the  quality  of  milk.  Commercial  pasterization  was 
another  effort  to  put  milk  out  to  the  consumer  in  a  better  con- 
dition. 

The  certified  milk  movement  had  for  its  object  the  securing 
of  an  ideal  milk  supply,  and  while  this  was  also  limited  it  unques- 
tionably has  a  great  influence  in  the  improvement  of  market  milk 
by  placing  before  the  public  the  highest  ideals  in  milk  produc- 
tion. This  was  followed  in  many  of  the  large  cities  by  the  estab- 
lishment of  infant  milk  depots,  the  object  of  which  was  to  place 
a  pure,  clean,  safe  milk  within  the  reach  of  the  infants.  Statistics 
show  that  this  work  has  reduced  the  death  rate  very  greatly,  in 
some  instances  it  has  been  reported  as  high  as  50  per  cent. 

The  application  of  the  tuberculin  test  to  any  herd  properly 
controlled  for  a  period  of  five  years  will  eliminate  all  diseased 
cows  and  will  avoid  any  expense  for  loss  after  that  time.  It  will 
cost  the  public  one  cent  per  quart  during  that  period. 

DR.  E.  C.  SCHROEDER  OF  THE  BUREAU  OF  ANIMAL 
INDUSTRY,  WASHINGTON,  D.  C. 

"  If  the  public  was  informed  of  the  dangers,  among  which 
tuberculosis  is  one  of  the  many,  to  which  it  is  exposed  through 
the  use  of  impure,  dirty  and  infected  milk,  the  demand  for  milk 
of  approved  purity  would  rise  to  the  magnitude  of  a  concerted 
national  movement."' 

Farmers  when  fully  advised  cheerfully  co-operate. 

Pasteurization  of  milk  in  the  city  does  not  prevent  the  spread 
of  the  disease  among  the  animals  in  the  country.  It  does  not  pre- 
vent the  forty  million  dollars  annual  loss  to  the  animal  industry 
in  this  country. 

DR.  H.  L.  RUSSELL,  DEAN  OF  COLLEGE  OF  AGRICUL- 
TURE, MADISON,  WES. 

No  one  claims  that  the  larger  portion  comes  from  bovine 
sources,  but  there  is  evidence  that  a  certain  portion  does  come 
through  this  source.  We  have  got  to  force  this  question  whether 


318  [SENATE 

we  want  to  or  not.  We  have  a  million  and  a  half  dairy  animals 
in  our  State  and  it  would  require  too  many  inspectors  to  enforce 
a  State  law  prohibiting  the  sale  of  milk  coming  only  from  tuber- 
culin tested  cows.  It  will  of  necessity  temporarily  increase  the 
cost  of  milk  to  the  consumer.  In  Denmark  at  one  time  40  per 
cent,  of  the  herds  had  tuberculosis.  Something  must  be  done  to 
avoid  similar  condition  here.  Cooperation  between  all  interested 
is  necessary  to  stamp  it  out. 

B.  II.  RAWL,  CHIEF  OF  DAIRY  DIVISION,  BUREAU  OF 
ANIMALS  IXDI'STKV,  WASHINGTON,  D.  C. 

After  securing  co-operation  between  the  interested  parties,  com- 
petent teachers  rather  than  inspectors  are  essential  to  represent 
the  State  among  the  farmers.  The  problem  of  clean  milk  is  one 
That  involves  the  inspector  or  teacher,  the  producer  and  the  con- 
sumer. The  producer  must  be  taught  how  to  conduct  his  dairy 
in  the  economical  way,  so  that  an  exorbitant  price  will  not  be 
necessary  in  order  to  enable  him  to  make  a  reasonable  profit  on  it. 
The  inspector  must  be  a  teacher  and  the  consumer  must  realize 
the  difference  in  value  of  the  product  and  must  be  willing  to  pay 
a  reasonable  price  for  high  quality  and  thus  make  it  possible  for 
high  quality  to  be  produced  profitably. 

DR.  G.  KOEHLER,  CHIEF  FOOD  INSPECTOR,  DEPART- 
MENT OF  HEALTH,  CHICAGO,  ILL. 

Pasteurization  is  highly  important,  and  its  missunderstandings 
are  based  upon  the  different  meanings  of  the  term  on  account  of 
the  varying  amounts  of  heat  applied  and  results  accomplished. 
It  is  done  for  two  reasons.  Firstly,  to  enhance  the  keeping  quali- 
ties of  the  milk.  This  is  accomplished  by  destroying  the  lactic 
acid  bacteria.  Secondly,  it  is  necessary  as  a  means  of  rendering 
a  safe  milk  supply  that  could  not  otherwise  be  procured  in  large 
enough  quantities  to  supply  our  rapidly  increasing  urban  popu- 
lation. In  the  city  of  Chicago  two  epidemics  of  typhoid  fever 
were  traced  directly  to  the  milk  supply.  In  Washington  it  was 
found  that  10  per  cent,  of  the  cases  of  typhoid  fever  have  resulted 
from  infection  by  milk.  In  a  recent  thorough  investigation  of 


No.  45.]  319 

milk-born  epidemics  made  by  Dr.  J.  W.  Trask  and  reported  in 
Bulletin  No.  41  of  the  Public  Health  and  Marine  Hospital  Ser- 
vice, 179  epidemics  of  typhoid,  51  of  scarlet  fever  and  23  of 
diphtheria  were  traced  directly  to  the  milk  supply.  The  only  way 
to  practically  eliminate  the  spread  of  contagious  diseases  seems  to 
be  the  proper  pasteurization  of  the  milk,  and  through  adequate 
control  guard  against  improper  pasteurization.  Certain  bacterial 
standards  prove  to  be  essential  for  pasteurization. 

EXPERIENCE  OF  A  LARGE  FARMER  FOR  THIRTY 
YEARS,  WHO  KEPT  AN  ACCURATE  ACCOUNT  OF 
THE  COST  OF  PRODUCING  MILK. 

BY  ALFRED  ELY. 
(Attorney   for   Consolidated  Milk  Exchange.) 

I  have  taken  the  last  six  years  returns  from  my  farms,  with 
respect  to  which  I  have  kept  accurate  statistics,  and  I  have  aver- 
aged those  last  six  years  returns  in  a  variety  of  ways. 

I  have  taken  four  farms  for  the  six  years  and  averaged  them. 
I  have  then  taken  two  separate  farms  and  averaged  them  together 
for  six  years,  the  conditions  on  those  two  farms  being  almost 
identical  in  so  far  as  it  is  possible  to  have  two  farms  operating 
under  the  same  conditions. 

I  have  taken  one  other  farm  where  the  conditions  were  better 
than  the  two  preceding  farms  and  averaged  those  up  for  six  years, 
and  I  have  averaged  this  last  farm  back,  for  eleven  years. 

I  find  the  price  of  milk  which  I  have  received  for  those  six 
years,  averaged  up,  is  as  follows,  this  being  the  actual  price  per 
quart  actually  received  by  me  in  cash,  the  gross  receipts  being 
divided  by  the  gross  number  of  quarts,  so  that  this  result  is  with- 
out any  connection  whatever  with  any  posted  price  or  contract 
price,  the  differences  resulting  from  the  fact  that  more  money 
might  be  made  under  one  price,  or  more  money  might  be  made  in 
the  winter  months  than  the  summer  months,  or  vice  versa : 

For  four  farms  averaged  for  six  years,  beginning  April  1,  1903. 
and  ending  April  1,  1909,  I  received  .0299  cents  per  quart;  that 
is  one-hundredth  of  a  cent  less  than  three  cents.  My  feed  during 
those  six  years  averaged  up  for  the  four  farms  was  49  per  cent. 


320  [SENATE 

of  the  price  received,  and  my  proceeds  for  cow  milking  averaged 
for  the  six  years  on  the  four  farms  was  $50.03,  after  deducting 
the  feed  bills  for  mill-feeds. 

Now,  during  this  period  and  under  the  same  average  it  took 
1.15  pounds  of  feed  to  make  one  quart  of  milk,  at  an  average  cost 
per  quart  of  $0.0141.  That  is  one  and  four-tenths  cents  for  the 
mill-feed. 

Now,  take  two  other  farms  where  the  conditions  are  identical 
as  far  as  it  is  possible  for  them  to  be;  they  lie  right  together  as 
parts  of  the  same  tract;  for  the  six  years  I  received  .0290  cents 
per  quart.  The  cost  of  the  feed  was  approximately  .308  per  cent- 
of  the  price.  The  proceeds  per  cow  milking  after  deducting  the 
feed  bills,  but  making  no  other  deductions,  was  $54.37  per  cow- 
milking. 

Now,  take  one  other  farm,  a  farm  by  itself,  not  included  in  the 
foregoing,  for  the  same  six-year  period,  averaged,  my  actual  price 
received  was  $0.0299  per  quart.  The  feed  was  43  per  cent,  of 
the  price.  And  the  receipts  per  cow  mi  Iking,  after  deducting  the 
feed  bills,  was  $04.98. 

Now,  take  the  same  farm  for  11  years,  beginning  with  April  1. 
1898,  and  ending  April  1,  1909,  my  price  received  was  $0.0272 
per  quart.  My  average  feed  was  .418  per  cent,  of  the  price  re- 
ceived (I  am  speaking  only  of  my  own  prices  received)  and  the 
receipts  per  cow  milking,  after  deducting  the  feed  bills  for  eleven 
years,  was  $59.73  per  cow  milking.  It  took  during  those  eleven 
years  1.7  pounds  of  mill-feed,  averaged  through  the  year,  to  make 
a  quart  of  milk,  at  an  average  price  for  the  eleven  years  of 
$0.0114. 

THE  REFEREE. —  You  mean  grain  or  feed  ? 

THE  WITNESS. —  I  mean  all  feed  that  is  fed.  weighed  up  by 
the  pound  and  averaged  for  the  year.  I  know  what  I  am  feeding; 
I  keep  track.  That  is  all  the  feed  that  is  fed.  Mill-feeds. 

Now,  the  average  feed  fed  during  the  six  years,  averaged  up 
for  all  these  farms,  and  under  varying  conditions,  was  .421  per 
cent,  of  the  price  received  for  the  milk;  slightly  over  42  per  cent. 
So  that  is  a  very  close  approximation,  and  in  my  opinion  that  is 


No.  4-5.]  321 

an  almost  absolutely  -  accurate  approximation  of  the  cost  of  feed 
in  producing  one  quart  of  milk;  42  per  cent  of  the  price  received 
is  expended  in  feed.  In  other  words,  the  price  of  milk  as  aver- 
aged being  $0.0299  per  quart,  the  cast  of  feed  per  quart  is 
$0.012588;  so  there  is  one  cent  and  about  twenty-six  one-hun- 
dredths.  Now,  the  cost  of  labor,  maintenance  of  machinery  and 
teams  and  other  items  of  that  kind,  on  the  same  basis,  is  .008656 
cents  per  quart  for  this  period;  that  leaves  a  balance  of  slightly 
over  eight-tenths  of  a  cent  per  quart  to  the  farmer  is  all  that  is 
left  to  pay  the  following  items :  Taxes,  which  will  average  about 
$4  per  cow;  insurance,  all  repairs  to  buildings  and  plant,  all  in- 
terest on  plant  and  the  investment,  and  any  profit  there  may  be. 

Now,  in  my  opinion,  there  are  very  few  farmers  who  have 
any  such  accurate  statistics  running  over  a  period  of  years  out  of 
which  it  is  possible  to  make  any  computation  of  costs,  and  in  my 
judgment  those  figures  are  substantially  accurate  results. 

THE  REFEREE. —  Do  you  figure  in  there  any  allowance  for  ad- 
ministration ? 

The  Witness. —  None  whatever ;  that  is,  none  whatever  for 
myself,  noi*  supervising. 

Now,  I  would  like  to  add  this:  Since  1898  the  average  price 
of  milk  to  the  farmer  has  been  steadily  increasing,  and  taking  one 
of  my  farms  for  those  eleven  years,  the  following  are  the  prices 
which  I  have  actually  received  for  my  milk  for  the  year,  based 
on  (a  division  of)  the  gross  receipts  from  the  milk  divided  by  the 
actual  number  of  quarts  sold;  those  are  all  farm  year  calculations; 
bear  in  mind  that  the  farmer  knows  nothing  about  the  calendar 
year,  and  any  attempt  to  figure  upon  the  calendar  year  will  result 
in  errors : 

April  1,  1898,  to  April  1,  1899,  at  .021  per  quart. 
April  1,  1899,  to  April  1,  1900,  at  .0231  per  quart. 
April  1,  1900,  to  April  1,  1901,  at  .0247  per  quart. 
April  1,  1901,  to  April  1,  190'2,  at  .0237  per  quart. 
April  1,  1902,  to  April  1,  1903,  at  .0268  per  quart. 
April  1,  1903,  to  April  1,  1904,  at  .0257  per  quart. 
The  average  of  those  six  years  is  .0242  per  quart. 
April  1,  1904,  to  April  1,  1905,  at  .0257  per  quart. 
11 


322  ['SENATE 

April  1,  1905,  to  April  1,  1906,  at  .0293  per  quart. 
April  3,  1906,  to  April  1,  1907,  at  .0302  per  quart. 
April  1,  1907,  to  April  1,  1908,  at  .0346  per  quart. 
April  1,  1908,  to  April  1,  1909,  at  .0339  per  quart. 
That  you  see  is  three  and  four-tenths  cents  almost. 

Those  were  the  actual  prices  which  I  received  during  those 
years  at  this  particular  farm,  which  is  fairly  standard. 

Now,  during  that  same  period  there  have  been  great  fluctua- 
tions in  the  amount  of  feed  required  to  produce  a  quart  of  milk, 
and  there  have  been  some  fluctuations  in  the  value  of  the  feed  in 
comparison  with  the  price,  but  the  cost  of  feed  in  1908  and  1909 
was  the  highest  we  have  ever  known  it  to  be  and  was  50  per  cent, 
of  the  gross  receipts  of  the  price  received,  so  that  upon  a  price 
received  of  three  and  four-tenths  cents  one  and  seven-tenths  cents 
went  to  feed.  We  had  to  pay  that  year  as  high  as  thirty-one  and 
thirty-two  dollars  per  ton  for  fe<>d  ;  and  it  takes  just  as  many 
pounds  of  feed  to  make  a  quart  of  milk  that  year  as  it  did  any 
other  year. 

Now,  during  that  last  year  my  balance  per  cow  milking,  after 
deducting  my  feed  bills,  was  $63.95  per  cow,  while  the  preceding 
year,  1907-8,  the  feed  bills  were  only  about  36  per  cent,  of  the 
price  and  my  balance  per  cow  was  $100.86  per  cow  milking. 

Now,  as  a  general  result  of  these  figures,  and  my  own  experi- 
ences for  thirty  years,  in  farming,  my  observation  of  my  friends 
and  neighbors  who  are  around  me  in  all  directions,  I  want  to  say 
that  in  my  opinion  there  is  no  approximate  cost  for  the  production 
of  milk  per  quart,  but  that  the  cost  will  vary  according  to  each 
farm  and  according  to  each  farmer  and  the  conditions  under  which 
lie  is  operating,  and  also  according  to  the  quantities  of  milk  which 
he  makes  each  month  during  the  year,  in  my  opinion  the  one 
most  important  fact  with  reference  to  the  cost  of  milk  and  the 
profit  to  the  farmer  is  the  quality  of  the  cow,  with  the  single 
exception  of  the  number  of  pounds  of  feed  which  it  takes  to 
make  a  quart  of  milk.  A  ten-quart  cow  or  eleven-quart  cow  costs 
no  more  than  an  eight-quart  cow. 

THE  REFKREE  : 

Costs  no  more  to  feed  ? 


No.  4t>.]  323 

THE  WITNESS: 

Costs  no  more  to  produce  the  milk  from  one  cow  than  from 
another;  it  costs  no  more  to  produce  an  average  of  11  quarts  than 
8  quarts  per  day,  except  the  cost  of  the  feed. 

The  difference  between  two  of  my  farms  which  I  have  given 
you  are  explained  in  this  way  —  some  of  the  differences :  The 
average  cost  per  cow  milking  per  day  for  four  farms,  averages 
for  six  years,  was  8.98  quarts  per  day  per  cow  milking.  Now, 
two  of  those  farms,  however,  produced  an  average  of  8.28  quarts 
per  cow  per  day  only.  During  the  same  period  one  of  those  farms 
produced  10.63  quarts  per  day  per  cow  milking,  and  this  same 
last  farm  for  an  average  of  eleven  years  produced  10.39  quarts 
per  day  per  'cow  milking  during  the  entire  eleven  years.  That 
difference  of  tAVO  and  a  half  quarts  per  day  makes  a  difference 
between  a  profit  and  no  profit. 

I  would  like  to  say  another  thing.  One  of  the  greatest  ele- 
ments of  expense  —  the  two  great  elements  of  expense  to  the 
farmers  in  producing  milk  are,  first,  the  cost  of  feed,  which  has 
more  than  doubled ;  I  have  bought  the  same  feed  at  twelve  or 
thirteen  dollars  per  ton  that  I  am  now  paying  twenty-nine  or 
thirty  dollars ;  and,  second,  the  item  of  labor,  which  has  more  than 
doubled  in  the  last  fifteen  or  twenty  years,  in  my  judgment  owing 
very  largely  to  the  operations  in  this  country  of  the  protective 
tariff  laws  which  have  attracted  all  the  labor  possible  into  the 
manufacturing  villages  where  the  profits  of  business  permit  the 
payment  of  higher  wages,  than  it  is  possible  for  the  farmer  upon 
these  close  margins  to  compete  with. 

THE  REFEREE: 

How  do  you  account  for  the  fact  that  if  labor  has  doubled,  and 
with  double  the  cost  price  and  feed  that  the  farmer  is  making 
now  more  than  he  did  twenty  years  ago1? 

THE  WITNESS: 

The  reason  is  this:  We  are  farming  far  more  intensely.  Take 
one  of  my  places  I  have  "in  mind,  I  am  carrying  on  an  average  of 
50  head  of  stock,  and  when  I  began  I  had  great  difficult  in  carry- 
ing 20  or  25,  and  my  gross  receipts  are  double  from  the  same 
farm  what  they  were  thirty  years  ago,  twenty-five  years  ago. 


32-t  [SENATE  No.  45.] 

THE  REFEREE: 

Accounted  for  by  the  more  intelligent  handling  of  the  soil  ? 

THE  WITNESS: 

Intense  farming.  I  am  making  milk  twelve  months  of  the  year, 
and  in  the  old  days  we  made  it  eight  month.-. 

This  is  to  certify  that  the  foregoing  is  a  synopsis  with  ap- 
pendix, as  prepared  by  me,  of  the  testimony  taken  before  me  in 
the  foregoing  proceeding. 

Dated,  New  York,  March  23,  1910. 

WILLIAM  GEANT  BROWN, 

Referee. 


INDEX. 


SUBJECT.  PAGE. 

Organization,  etc.,  of  Milk  Exchange  limited 8 

Exchange 9 

Cost  to  farmers  to  produce  a  quart  of  milk 10 

During  the  year  1909 • 14 

Statement  of  milk  delivered  in  New  York  city  during  the  farm  years  (including 
cream  and  condensed  milk)  in  cans  of  forty  quarts  each  (compiled  from  monthly 
reports  by  the  railroad  companies  by  Alfred  Ely,  attorney  for  the  Consolidated 

Milk  Exchange) 31 

Prices  paid  by  dealers  to  farmers  and  cost  of  handling  milk  from  producer  to 

consumer 32 

Comparison  of  Borden  and  Exchange  prices 38 

Price  of  fluid  milk  prevailing  in  various  cities  of  the  United  States  and  Canada .  .  39 

Statistical  report  on  population,  milch  cows,  etc 42 

Borden's  Condensed  Milk  Company  contract  (Exhibit) 43 

Summarized  testimony  of  Marvin  Scudder,  Accountant 46 

Concise  digest  of  salient  points  from  testimony  of  milk  producers: 

Axtell,  Delos 48 

Barber,  Osman  L 50 

Bauder,  Frank  W 51 

Blandy,  Isaac  C 52 

Brown,  George  M 56 

Brown,  Edward  J - 57 

Comfort,  Stewart  S 58 

Cook,  Herbert  E 61 

Eastman,  Almon  R 64 

Greaves,  George  H 66 

Howell,  Benton : 71 

Kay,  Will  E 73 

Livingston,  Benjamin  F 74 

Locke,  H.  La  Mott '. 76 

Mather,  William  A * 80 

Moe,  Albert  J 81 

Moulten,  Charles  F 82 

Xicoll,  Andrew  J .  .  , 84 

Parkinson,  Edward  K 85 

Petteys,  John  S 87 

Richardson,  William  P , 88 

Sanford,  Edward  B 94 

Sanf ord,  Milton  L 96 

Stevens,  Henry 98 

Strong,  William  H 100 

[325] 


326  [SENATE- 

SUBJECT.  PAGE 

Concise  digest  of  salient  points  from  testimony  of  milk  producers  —  Continued. 

Vail,  Hurry 100 

Wells,  William  A. 102 

Wikoff,  Rufus 102 

Young,  Henry 104 

Concise  digest  of  salient  points  from  testimony  of  milk  dealers  and  creamery 
men: 

Arnstein,  Henry 107 

Baker,  Robert  Bruce 109 

Beakes,  Charles  H.  C Ill 

Bennett,  William  H 123 

Bleier,  David 124 

Campbell,  Alexander 126 

Campbell,  Luther  L , 136- 

Carpenter,  Linn  E 141 

Chardavoyne,  Henry  S 144 

Cochran,  Mr 146 

Conklin,  William  B 153 

Decker,  Thompson  W 159 

Ely,  Alfred 160 

Ferris,  Joseph  A 172 

Gorman,  Thomas  A 175 

Hale,  H.  Oscar 179 

Halsey,  Benjamin  S 182 

Hamilton,  Louis  A 183 

Harrison,  Webb 183 

Helfand,  Tone 188 

Herkstroter,  Fred  H .189 

Horton,  David  S 190 

Horton,  Loton 190 

Huth,  Adolph .196 

Ihnken,  George 197 

Jetter,  John 198 

Johnson,  Charles  E 199 

Jordan,  Joseph  V •   200 

Kavanaugh,  James  J 202 

Kehrer,  John  H 208 

Keogh,  John 209 

Laemmle,  Joseph ...   211 

Lawrence,  William  A 228 

Levy,  Samuel 230 

Magoon,  Isaac 232 

Marsten,  Edgar  L 235 

Milbank,  Albert  J 235 

Milbank,  Dunlevy 236 

Milburn,  Arthur  W 236 

Millett,  Stephen  C 246 

Miller,  Louis  J 248 

Mogeluf,  Nathan 251 


Xo.  45.]  327 

SUBJECT.  PAGE. 

Concise  digest  of  [salient  points  from  testimony  of  milk    dealers  and  creamery 
men  —  Continued. 

Nicholls,  George  L 254 

Oher,  Christian 255 

Paul,  John 256 

Posner,  Isaac 257 

Rauch,  Henry 258 

Rider,  James  C 261 

Rogers,  William  E ' 264 

Rogers,  William  J 268 

Sanford,  Francis  B 277 

Silber,  Theodore , 277 

Taylor,  Frederick  S 278 

Tuthill,  Horace  S 279 

Vagts,  Chris 282 

Vanhof,  Charles,  Jr 283 

Van  Bomel,  Isaac  A 284 

Wierck,  John  P 287 

Wright,  William  Alexander 291 


APPENDIX. 


Milk  Supply  of  New  York  city,  with  recommendations  submitted  to. the  mayor 

by  the  milk  commission 295 

Dr.  E.  J.  Lederle,  Ph.  D.,  commissioner  of  health,  city  of  New  York,  in  a  paper 

read  before  the  second  annual  convention  of  the  International  Milk  Dealers 

Association,  held  in  Milwaukee,  October  18,  1909 296 

Country  milk  and  dairy  inspection  by  the  department  of  health,  city  of  New 

York \...k 302 

Letter  on  pasteurization  from  W.  A.  Evans,  commissioner  of  health  of  the  city 

of  Chicago,  Illinois 305 

Extracts  from  a  report  to  Mr.  Loton  Horton  by  an  eminent  authority  on  milk 

supply  and  milk  control  in  Berlin 306 

Milk  cure  establishment  at  Victoria  Park,  Berlin 308 

Tuberculosis  report  by  United  States   Department   of  Agriculture  (Bureau  of 

Animal  Industry) 309 

Milk  as  a  medium  for  infectious  diseases;  pasteurization 309 

Infection  of  humans  by  bovine  bacilli  in  Leipzig,  Germany 310 

Milk  as  a  vehicle  of  germs;  committee  report  on  milk  in  District  of  Columbia 31 1 

The  thermal  death  points  of  pathogenic  micro-organisms  in  milk  by  Milton  J. 

Rosenau 314 

Transmission  of  tuberculosis  from  animal  to  man;  certified  milk  and  commercial 

pasteurization 316 

Inspection  of  dairies  for  tuberculosis  in  cattle 317 

Pasteurization  by  Dr.  G.  Koehler,  department  of  health,  Chicago,  Illinois 318 

Account  of  the  cost  of  producing  milk  by  a  farmer  of  thirty  years'  experience 

k_  (compiled  by  Alfred  Ely,  attorney  for  the  Consolidated  Milk  Exchange) 319 

[329] 


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UNIVERSITY  OF  CALIFORNIA  LIBRARY 


